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Amazon faces CMA investigation over suspected anti-competitive practice

The investigation will consider whether Amazon is ‘distorting competition by giving an unfair advantage to its own retail business or sellers’

Amazon is facing an investigation by the Competition and Markets Authority (CMA) over concerns that practices affecting sellers on its UK marketplace may be anti-competitive and “could result in a worse deal for customers”.

The CMA said its investigation will consider whether Amazon has a dominant position in the UK and whether it is “abusing” that position and “distorting competition” by giving an unfair advantage to its own retail business or sellers that use its services, compared to other third-party sellers on the Amazon UK Marketplace.

The investigation will focus on three main areas, including how Amazon collects and uses third-party seller data, such as whether this gives Amazon an “unfair advantage” in relation to business decisions made by its retail arm.

It will also look at how Amazon sets criteria for allocation of suppliers to be the preferred/first choice in the ‘Buy Box’, which provides customers with one-click options to ‘Buy Now’ or ‘Add to Basket’.

The investigation will also look at how Amazon sets the eligibility criteria for selling under the Prime label.

The CMA said that thousands of UK businesses use Amazon to sell products and it is important they are able to operate in a competitive market. It added that 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.

An Amazon spokesperson told Retail Sector: “We will work closely with the CMA during their investigation, although we believe we’ve always worked hard to help small businesses selling on Amazon to succeed, which is in both their and our best interests.

“More than 50% of all products sold on Amazon are from small businesses, and sales from our selling partners continue to grow faster than Amazon’s retail sales. There are now more than 65,000 small and medium-sized businesses in the UK that sell on Amazon, supporting more than 175,000 jobs across the country.”

Sarah Cardell, general counsel at the CMA, added: “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.”

Alongside this case, the CMA also has an open investigation into Amazon and Google, under consumer protection laws, over concerns that they have not been doing enough to combat fake reviews on their sites. The CMA has not reached any conclusions at this stage as to whether or not consumer laws have been infringed.

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