The European Commission (EC) has announced that it has reached an agreement with Amazon over a duo of antitrust probes, one that will enshrine commitments made by Amazon in European Union (EU) antitrust legislation.
The initial probe kicked off back in 2018, when regulators launched enquiries into how Amazon was leveraging non-public data from third-party marketplace sellers on its platform to benefit its own competing business as a retailer. The crux of the concerns centered on how Amazon was able to gain an unfair advantage through big data insights as the marketplace owner, such as optimizing its own pricing or deciding what new products to launch and when.
The probe escalated into a formal investigation the following year, before the EC issued Amazon with a direct Statement of Objections in 2020. Europe’s competition chief Margrethe Vestager said at the time that Amazon was likely abusing its market position in its biggest European markets in France and Germany, and was “illegally distorting” competition through its use of merchant data.
At the same time, the EC announced a second tangential investigation into how Amazon favored its own business in terms of rules it set merchants for being featured in its much-coveted “buy box” and Prime loyalty program. The Commission added that Amazon seemingly favored its own products, as well as sellers that use Amazon’s logistics and delivery services.
Commitments
In the intervening months, Amazon submitted proposals to appease regulators in an attempt to end the probe early, including commitments to: stop using non-public data from its marketplace sellers; treat all sellers equally, regardless of whether they pay for Amazon’s logistics services; allow Prime sellers to choose any carrier for their deliveries. However, the bloc was urged by NGOs, trade unions and digital rights groups to reject what they deemed to be a “weak” offer by the e-commerce giant, arguing that the Commission should pursue the probe through to its natural conclusion, which may eventually have involved a huge fine.
Fast-forward to today, and the Commission has said that Amazon has made some amendments to its initial offer, which includes improving the layout of a second competing “buy box” that Amazon had earlier proposed, and several other changes that it says will increase transparency and data protection for third-party merchants on the platform.
“Today’s decision sets new rules for how Amazon operates its business in Europe,” noted Margrethe Vestager, the European Commission’s executive vice-president for competition policy, in a statement. “Amazon can no longer abuse its dual role and will have to change several business practices. Competing independent retailers and carriers as well as consumers will benefit from these changes opening up new opportunities and choice.”
These commitments, according to the EC, will be legally binding and cover Amazon’s activities across the whole European Economic Area (EEA), though Italy is excluded from the “buy box” and Prime commitments due to a separate case brought by Italy against Amazon back in 2021.
The Prime and “buy box” commitments will remain enforceable for seven years, while all the remaining commitments will apparently lapse after five years. If Amazon is found to have breached any part of these commitments in that period, it could face a fine of 10% of its global revenue.
Today’s announcement comes just a day after the EC issued a preliminary finding that Facebook’s parent company Meta abused its dominant market position in the classifieds ads space, in contravention of Article 102 of the Treaty on the Functioning of the European Union (TFEU), the same treaty that Amazon allegedly contravened.
However, while Amazon will have to change the way it operates in Europe, the company said that it doesn’t agree with a number of the EC’s assertions.
“We are pleased that we have addressed the European Commission’s concerns and resolved these matters,” an Amazon spokesperson told TechCrunch in a statement. “While we continue to disagree with several of the preliminary conclusions the European Commission made, we have engaged constructively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium sized businesses selling through our stores.”