Amazon Proposes To Change Marketplace Practices In Hopes Of Appeasing U.K. Regulator

credit: timesofindia.indiatimes

UK (Parliament Politic Magazine) – Amazon offered commitments to the UK Competition and Markets Authority (CMA) on Wednesday, in response to concerns raised by Britain’s competition watchdog regarding the treatment of third-party sellers by the US e-commerce giant. The CMA stated that if accepted, the remedies proposed by Amazon would effectively address its competition concerns. This comes as part of an investigation that commenced slightly over a year ago.

Amazon Accused Of Exploiting Dominant Market Position

In July 2022, the Competition and Markets Authority (CMA) initiated an investigation into Amazon, accusing the company of exploiting its dominant market position to favor its own retail business and sellers utilizing its services, while disadvantaging third-party merchants on its marketplace.

On Wednesday, the CMA announced that Amazon has put forth several commitments to address these concerns. One of these commitments aims to prevent Amazon from leveraging marketplace data belonging to rival sellers to gain an unfair advantage over other sellers. The CMA had expressed worries that Amazon’s access to “commercially sensitive data” pertaining to third-party sellers could give the e-commerce giant an upper hand in determining which products to sell and how to price them.

CMA Has Raised Concerns Over The Products Sold By Third Parties

Additionally, Amazon’s commitments propose to ensure that all product offers are treated equally when the company determines which ones will be featured in the coveted “Buy Box.” This particular section on Amazon’s product pages allows customers to make a one-click purchase or add items to their basket.

The CMA has raised concerns that products offered by third-party sellers are less likely to be featured in the “Buy Box” compared to Amazon’s own products.

By addressing these issues, Amazon aims to rectify the alleged unfair advantage it has enjoyed over third-party sellers and promote a more level playing field in its marketplace.

Amazon Makes An Offer To Third-Party Sellers In The UK

Amazon has made an offer to third-party sellers, allowing them to directly negotiate their own rates with providers of Amazon’s Prime delivery service, as confirmed by the Competition and Markets Authority (CMA). As part of the proposals submitted to the CMA, Amazon will be required to appoint an independent trustee who will monitor the company’s compliance with its commitments to the regulator. The CMA will have a significant role in the selection of this trustee.

Ann Pope, the senior director for enforcement at the CMA, expressed her belief that Amazon’s commitments will ensure fair competition for third-party sellers on Amazon Marketplace, enabling them to compete on an equal footing with Amazon’s own retail business.

Ultimately, this will result in better deals for customers in the UK. These commitments are currently under consultation and are expected to address the concerns raised by the CMA. The third-party sellers may be enticed by the offer because it can lead to a lot of profits for their small businesses. 

Read More: UK Firms Boost AI Investment As Businesses Confidence Remain Strong

European Union Regulators Concerned About Amazon Proposal

Amazon’s marketplace practices have also raised concerns among European Union regulators, who have been investigating similar issues since 2019. In December, Amazon offered similar commitments to the European Commission to address their concerns.

However, the scrutiny on Amazon is not limited to the UK and the EU. 

Politico reported on Tuesday that the Federal Trade Commission in the US is finalizing a major antitrust lawsuit against Amazon, covering various aspects of its business.

By taking these steps, Amazon aims to address the concerns raised by regulators and ensure fair competition in the marketplace.

Amazon has announced that it will now allow third-party businesses using its Marketplace platform to directly negotiate rates with independent providers of Prime delivery services. This move aims to secure potentially more affordable deals for these businesses. Additionally, Amazon will be required to appoint an independent trustee who will oversee the company’s adherence to these commitments.

The Competition and Markets Authority (CMA) is currently reviewing these proposed changes. However, their initial assessment suggests that these measures effectively address their concerns regarding competition. Ann Pope, the senior director for enforcement at the CMA, stated that Amazon’s commitments will ensure a level playing field for third-party sellers on Amazon Marketplace. Ultimately, this will result in better deals for customers in the UK.

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.