Amazon could change marketplace rules to address CMA concerns

Amazon has offered to alter the way it handles third-party sellers on its UK marketplace after the Competition and Markets Authority (CMA) raised concerns over its practices.

The competition watchdog launched an investigation into Amazon last year as it was concerned the company was abusing its position as a leading online retail platform by giving an unfair advantage to its own retail business or to sellers who use its warehousing and delivery services instead of other logistics services.

The commitments aim to prevent the online retailer from using data obtained from third-party sellers to give itself an unfair competitive advantage.

If these promises are accepted by the CMA, products sold by third parties will have a fair chance of being prominently displayed to customers in the “Buy Box” on a product page when they are competing against Amazon’s own product offers.

Third party sellers will also be able to negotiate their own rates directly with independent providers of Prime delivery services, allowing customers to benefit from lower delivery costs if better rates are negotiated.

The regulator said its initial view on Amazon’s pledge to change its practices is that the amendments will address its competition concerns.

However, it will now consult on the e-commerce giant’s proposals before it decides whether to accept them.

The CMA said it will require Amazon to appoint an independent trustee who will monitor the company’s compliance with these commitments. The authority will have a direct say in this appointment, ensuring they have the necessary skills and expertise for the job.

“Amazon’s commitments to the CMA will help ensure that third-party sellers on Amazon Marketplace can compete on a level-playing field against Amazon’s own retail business and, ultimately, mean that customers in the UK get a better deal,” said Ann Pope, senior director for enforcement at the CMA. “The CMA took this action after it heard concerns that Amazon was using its strength in the market to gain an advantage over thousands of businesses which use Amazon Marketplace to reach customers.”

She added: “The CMA is now consulting on Amazon’s proposed commitments. If they are accepted, this would avoid having to pursue a potentially lengthy investigation and leads to earlier changes that would benefit businesses and consumers. The CMA has not made any finding at this stage of the investigation that competition law has been infringed.”

    Share Story:

Recent Stories

The Very Group
The Very Group transformed range and assortment planning using Board.

Watch the full video

Smarter merchandise planning across the retail value chain
In this webinar, Matt Hopkins, Head of Retail Solutions, Board, Catherine Tooke, SVP Product & Planning, Sweaty Betty, and Subir Gupta, Managing Principal, Thought Provoking Consulting join Retail Systems Editor Jonathan Easton to discuss the findings of the recent Retail Systems report The Merchandise Planning Challenge: How are retailers harnessing technology to optimise planning and retain customers? and examine the innovations that are improving retail planning.