Amazon strikes deal with EU to close anti-trust probes

Online retail giant Amazon has reached an agreement with the European Commission to close two inquiries into anticompetitive tactics, notably using third party seller data to improve its own sales.

The agreement allows Amazon to avoid a legal battle with the EU’s top antitrust watchdog that could have ended with huge fines, worth up to 10 per cent of its annual worldwide revenue.

“Today's decision sets the rules that Amazon will need to play by in the future instead of Amazon determining these rules for all players on its platform,” said EU Vice President Margrethe Vestager, as she made the announcement at a press conference in Brussels.

“With these new rules, competing independent retailers, carriers, and European customers will have more opportunity and more choice,” she added.

Amazon has until June 2024 to implement the new rules, which include refraining from using non-public seller data for the benefit of its own retail operations.

The EU considers that Amazon unfairly benefits from its dual role as both a platform where independent sellers can sell their products and as a retailer which is in competition with these independent sellers.

By using data from independent sellers to make its own business decisions, Amazon takes less business risk than these competing sellers which do not have access to such data, according to the EU.

“Our preliminary conclusion was that the use of data was an abuse of Amazon’s dominant position on a marketplace,” said Ms Vestager.

Amazon will also have to apply non-discriminatory conditions and criteria for sellers to access its so-called Buy Box, which offers the option to buy easily and fast, and display a second Buy Box, which will appear when there is a second offer that is different from the first one on price or delivery.

The EU considers that the Buy Box favoured Amazon retail operations. The aim of the second Buy Box is to give more visibility to independent sellers. The Commission will be able to monitor the performance of this second box and request adjustments if consumers are not sufficiently active on it.

Finally, Amazon must stop favouring its own retail and logistics operations when it comes to its Prime service, which is rapidly growing in Europe and also represents the highest spending and most loyal group on the marketplace, according to Ms Vestager.

Prime sellers will be free to choose any carrier for their logistics and carrier services, which is currently not possible. Amazon will not be able to prevent carriers from directly contacting customers to track their parcels.

“We are pleased that we have addressed the European Commission’s concerns and resolved these matters,” Amazon said in a prepared statement.

Amazon’s compliance with the new rules will be ensured by both a complaint mechanism and a monitoring trustee, said Ms Vestager.

These commitments end two investigations into Amazon’s business practices launched by the EU in recent years.

They are in part based on feedback received by the Commission between July and September 2022 from sellers, including publishers, seller associations, carriers, consumer associations, and academics.

The Commission first opened an investigation into Amazon’s use of non-public data of its marketplace sellers in July 2019. It opened a second investigation into Amazon’s buy box in November 2020.

The settlement is the latest round in a long-running Europe-wide crackdown on the market power of tech firms such as Google, Apple and Meta Platforms that has led to multiple probes, fines and beefed-up laws.