Amazon faces UK investigation for alleged competition law breach

By Julia Wray 6-Jul-2022

Britain’s Competition and Markets Authority is scrutinising whether Amazon gives own sellers an advantage over third parties

Amazon is facing a UK probe into a possible competition law breach.

The country’s antitrust body, the Competition and Markets Authority (CMA), launched an investigation yesterday under Chapter II of the Competition Act 1998.

The CMA said it would consider whether Amazon has a dominant position in the UK, and whether it is abusing that position by giving an unfair advantage to its own retail business (or sellers that use its services) compared with other third-party sellers on the Amazon UK marketplace.

The investigation will focus on three main areas: how Amazon collects and uses third-party seller data, including whether this gives Amazon an unfair advantage in relation to business decisions made by its retail arm; how Amazon sets criteria for allocation of suppliers to be ‘preferred’ and ‘first choice’ in its ‘buy box’ (displayed prominently on Amazon’s product pages); and how Amazon sets the eligibility criteria for selling under its ‘Prime’ label.

“Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button,” said Sarah Cardell, General Counsel at the CMA.

“This is an important area so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services – both of which could weaken competition.

“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market.

“A formal investigation will allow us to consider this matter properly.”

This new UK investigation follows two European Commission probes looking into similar concerns, and the CMS said it intends to liaise with the Commission as its own investigation in the UK progresses.

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Additionally, the CMA has a separate open investigation into both Amazon and Google over concerns that they have not been doing enough to combat fake reviews on their sites.

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