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The CMA said Amazon may be giving preferred sellers an unfair advantage, which could result in a worse deal for UK customers.
The UK’s competition watchdog is investigating Amazon over concerns that its marketplace practices are negatively impacting consumers and sellers in the country.
The Competition and Markets Authority (CMA) will look into whether Amazon has a dominant position in the UK and if it is abusing that position by giving an unfair advantage to its own retail business or preferred sellers.
The CMA noted that a large proportion of products on Amazon’s Marketplace are supplied by third-party sellers.
Amazon provides services to these sellers such as matching them with consumers, along with optional services with additional fees. This includes the Fulfilment by Amazon service, which handles aspects of the sales process such as storage, packaging and delivery.
The CMA is concerned that some of Amazon’s practices are anticompetitive, giving an advantage to sellers that use its services over other third-party sellers, which could result in a worse deal for customers.
“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market,” said CMA general counsel Sarah Cardell.
“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.”
The investigation will focus on three main areas to see if Amazon is giving itself or its preferred sellers an unfair advantage. These include how Amazon collects and uses third-party seller data, how Amazon sets the eligibility criteria for selling under the Prime label and the criteria to be listed as a first choice supplier in the ‘Buy Box’ display.
The CMA plans to liaise with the European Commission during its investigation, as the Commission has already opened two probes covering the same areas.
Microsoft’s acquisition under the microscope
The CMA has also launched an initial inquiry into Microsoft’s $69bn acquisition of game publisher Activision Blizzard.
This deal was first announced at the start of the year and was expected to close in Microsoft’s 2023 fiscal year. The acquisition would make Microsoft the world’s third-largest video game company by revenue after Tencent and Sony.
The CMA has started looking into whether the deal would lead to “a substantial lessening of competition” in the UK. The watchdog has invited interested parties to comment on the transaction and will decide by 1 September if it will escalate its investigation.
Last month, the CMA said it is considering a market investigation into Google and Apple’s dominant position in the mobile browser market. This came after a year-long study concluded the two tech giants have an “effective duopoly” on mobile ecosystems, which allows them to exercise a “stranglehold” over these markets.
In May, the UK watchdog also launched an investigation into potential anticompetitive behaviour by Google within the ad-tech space, which was the second probe into the search giant’s ad practices in less than three months.
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