The United Kingdom’s Competition and Markets Authority (CMA) is looking into whether Amazon “has a dominant position in the U.K. 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,” it announced in a Wednesday (July 6) press release.
The investigation, which will consider whether Amazon is offering preferential treatment to its own third-party sellers on the Amazon U.K. Marketplace, follows the European Commission’s examination of similar concerns for the world’s largest retailer.
Some Amazon Marketplace products are provided through Amazon’s own retail business, but “a large proportion are supplied by third-party sellers,” the release stated. “Amazon provides services to these sellers, including those that are essential to make sales, such as matching sellers with consumers,” and “offers optional services that incur additional fees,” such as the Fulfilment by Amazon service, covering some aspects of the sales process, “including storage, packaging and delivery.”
The CMA investigation will look into how Amazon collects and uses third-party seller data, how Amazon sets criteria for allocation of suppliers to be the preferred/first choice in the Buy Box, and how Amazon sets the eligibility criteria for selling under the Prime label, according to the release.
“Millions of people across the U.K. rely on Amazon’s services for fast delivery of all types of products at the click of a button,” said CMA General Counsel Sarah Cardell in the release. “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 favors sellers who use its logistics and delivery services — both of which could weaken competition.”
The CMA also has an open consumer protection investigation into Amazon and Google over concerns they haven’t been doing enough to combat fake reviews on their sites.
An Amazon spokesperson told PYMNTS that Amazon is proud to support the more than 65,000 small- to medium-sized business (SMBs) in the U.K. that sell on its platform.
“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,” the spokesperson said, adding more than 50% of all products sold on Amazon are from small businesses and partner sales “continue to grow faster than Amazon’s retail sales.”
In other news, the U.K. Treasury released a policy paper in June proposing a new regulatory framework that would provide the Bank of England (BoE) and the Financial Conduct Authority (FCA) with new powers to oversee tech firms that provide critical services to the financial industry.