Britain’s Competition and Markets Authority (CMA) has initiated a probe into Amazon’s practices to determine if they affect other players in a competitive marketplace. The CMA’s action comes as the agency suspects that the e-commerce giant is hurting the competitive environment because of some of its practices where it uses data from the third-party to promote its products.
Sarah Cardell, General Counsel at the CMA said, “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.”
The probe will look into how Amazon collects and uses third-party seller data, including whether this gives the company an unfair advantage in relation to business decisions made by its retail arm. The investigation will also consider the way that the company sets criteria for allocation of suppliers to be the preferred/first choice in the ‘Buy Box’. CMA will also conduct a thorough analysis of how Amazon sets the eligibility criteria for selling under the Prime label.
Cardell further said, “Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items, or having less choice. A formal investigation will allow us to consider this matter properly.”