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The EU investigations into how Amazon uses its non-public seller data have been going on for a few years, with the tech giant recently making some promises.
The European Commission has accepted a series of commitments made by Amazon that will ensure the tech giant does not use marketplace seller data for its own retail operations.
The EU has been investigating Amazon for the past number of years regarding its use of non-public marketplace seller data. Its first investigation began in 2019, with a statement of objection following up in 2020.
That statement found preliminarily that Amazon was dominant on the French and German markets for the provision of online marketplace services to third-party sellers. It also found that that Amazon’s reliance on marketplace sellers’ non-public business data to calibrate its retail decisions prevented effective competition, in violation of the EU’s competition rules.
Also in 2020, the EU opened a separate investigation to look into a possible bias by Amazon in granting sellers access to its Prime subscription service and the Buy Box, a panel that appears on the right-hand side of some product pages allowing buyers to purchase the items in their cart. This panel also recommends alternative items with their own ‘Add to cart’ button. The site’s algorithm determines what appears in the recommended section based on the specs of the item a customer is considering in the main screen.
The outcome of the second investigation also found fault with Amazon’s business practices. The commission preliminarily concluded that Amazon abused its dominance on the French, German and Spanish markets for the provision of online marketplace services to third-party sellers. It also preliminarily concluded that Amazon’s rules and criteria for the Buy Box and Prime unduly favoured its own retail business, as well as marketplace sellers that use Amazon’s logistics and delivery services.
Commitment to new business practices
To address the concerns outlined in both investigations, Amazon offered to commit to several new business practices.
It said it would not use non-public data relating to or derived from sellers’ activities on its marketplace for its retail operations.
It also pledged to treat all sellers equally when it comes to selecting those that ‘win’ the Buy Box.
Amazon has committed to adjustments for its Prime programme to make it fairer for sellers. It said it would allow Prime sellers to choose any carrier for their logistics and delivery services. It also said it would not use any information obtained through Prime about the terms and performance of third-party carriers for its own logistics services.
Additional recommendations
The European Commission market tested these adjustments during the period from July to September of this year. It made some additional recommendations to these commitments, including a centralised complaints mechanism open to all sellers and carriers, and improvements to carrier data protection.
The commission said it was satisfied that Amazon’s commitments meant it would not use marketplace seller data for its own retail operations and that it would not discriminate against certain sellers as part of its Buy Box and Prime programmes.
These commitments remain in force for the next several years and are legally binding. An independent trustee has been appointed to monitor the company’s adherence to the commitments.
If Amazon were to breach the commitments, the EU could impose a fine of up to 10pc of Amazon’s total annual turnover.
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