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The Competition and Markets Authority (CMA) in the UK is investigating Amazon on its dominant position in the UK. Amazon could be distorting competition. “Any loss of competition is a loss to consumers”, says Sarah Cardell, general counsel at CMA.
It is not the first time that online marketplace Amazon is being scrutinized. In December last year, it was fined by Italian market authority AGCM for abusing its market dominance. Currently, a European Commission is looking into similar concerns, but this does not cover issues in the UK as it has left the European Union.
Investigation into Amazon’s practices
Because of this, the CMA has launched its own investigation. The watchdog is particularly investigating whether Amazon gives an unfair advantage to its own business and sellers that use its services, such as Fulfilment by Amazon.
‘The investigation will look into how Amazon collects and uses third-party seller data.’
Additionally, the market authority will look into how Amazon collects and uses third-party seller data. This will grant information on whether this gives the ecommerce giant an unfair advantage in relation to business decisions. The criteria for its Buy Box allocation and for selling under the Prime label will also be scrutinized.
Negative impact on businesses and consumers
“Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button. This is an important area so it is 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”, says Sarah Cardell, general counsel at the CMA.
‘UK businesses selling on Amazon should be able to operate in a competitive market.’
“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. 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.”
Investigation by European Commission
Currently, the CMA also has another open investigation into Amazon and Google, over concerns that the companies are not doing enough to combat fake reviews. Additionally, the European Commission is also investigating Amazon covering these same areas. The CMA has announced that it will liaise with the European Commission on the investigation’s progress.
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