The European Commission announces that it accepts the commitments made by Amazon concerning certain practices considered to be anti-competitive. This relates to the prohibition of the use of data of sellers present on its marketplace as well as the guarantee of equal access to the Buy Box (the “Buy Box”) and the Prime program.
New rules of the game for Amazon data and algorithms
The devil is in the details, and it will have been necessary to define the rules of the game between the carriers, the merchants present on the market place and Amazon. The use of data and algorithms is at the heart of the issues. ” Until now, Amazon determined the rules applicable to all players on its platform notes Margrethe Vestager, Executive Vice-President of the European Commission in charge of competition policy.
Amazon is no longer master at home. ” With today’s decision, we set the rules that Amazon will have to follow in the future. Commitments will limit Amazon’s ability to abuse its role as marketplace service provider, seller and carrier at the same time she continues. “ Competing independent retailers and carriers, as well as consumers, will benefit immediately she announces.
Amazon’s commitments answer the Commission’s competition questions. This relates to Amazon’s use of non-public data from sellers in its marketplace and its possible bias in granting sellers access to its Buy Box and Prime program.
Amazon was distorting competition by using data from sellers on its platform
In November 2020, the Commission found that Amazon’s reliance on non-public commercial data from sellers active on its marketplace to adjust its retail offerings distorted competition on its platform. At the same time, the Commission had opened a second procedure to determine whether the criteria set by Amazon to select the winner of the “Buy Box” and allow sellers to offer products under its Prime program, led to preferring either sales own Amazon or sellers who use Amazon’s logistics services.
The Commission had concluded on a preliminary basis that Amazon’s rules applicable to the Buy Box and the Prime program unduly favor its own retail activities, as well as active sellers on its marketplace who use logistics and delivery services from Amazon. Faced with the European Commission, Amazon offered commitments. Regarding the use of data from sellers active in its marketplace, Amazon has proposed to refrain from using non-public data relating to or derived from the activities of independent sellers in its marketplace. , for its retail business that competes with these vendors.
This commitment applies both to Amazon’s automated systems and to employees who might cross-use Amazon Marketplace data to make retail decisions. Amazon has agreed not to use this data for the purpose of selling branded products or selling products under its own brand.
Equal treatment for merchants’ access to Amazon’s “Buy Box”
With respect to the “Buy Box”, Amazon proposed to apply equal treatment to all sellers when ranking their offers for the purpose of selecting the winner of the “Buy Box”. Amazon offers to display a second offer competing with that of the winner of the “Buy Box” if there is a second offer from another seller sufficiently differentiated from the first in terms of price or delivery. Both offers will display the same descriptive information and offer the same purchase possibilities.
With respect to Prime, Amazon proposed to set non-discriminatory terms and criteria for Prime eligibility of sellers active in the marketplace and offers. Amazon is committed to allowing sellers on Prime terms to freely choose carriers for their logistics and delivery services and to negotiate terms directly with the carrier of their choice. Finally, Amazon undertakes not to use, for its own logistics services, information obtained through Prime on the conditions and performance of third-party carriers.
Between July 14 and September 9, 2022, the Commission submitted Amazon’s commitments to market participants and consulted all interested third parties to verify whether the proposed commitments would eliminate the competition concerns it had identified.
Improved presentation of the 2nd competing offer of the ‘Buy Box’
In the light of the results of this consultation, Amazon has modified its initial proposal and has undertaken to improve the presentation of the second competing offer of the “Buy Box” by making it more visible and to provide for a review mechanism if the presentation does not attract enough consumer attention. In addition, Amazon will increase transparency and early information flows to sellers and carriers about commitments and their newly acquired rights, allowing, among other things, to quickly switch sellers to independent carriers.
Amazon will define the means for independent carriers to contact their Amazon customers directly, in accordance with data protection rules, in order to allow them to provide delivery services equivalent to those offered by Amazon. The American giant will improve the protection of carrier data against use by competing Amazon logistics services, in particular with regard to information on freight profiles.
Amazon will increase the powers of the monitoring agent by introducing new notification requirements. It will set up a centralized complaint mechanism, open to all sellers and carriers in the event of suspicion of non-compliance with commitments. Finally, it will increase to seven years, instead of the five years initially proposed, the duration of the commitments relating to Prime and the second competing offer of the “Buy Box”.
Non-discriminatory access to the “Buy Box” and the Prime program
Ultimately, the Commission finds that Amazon’s definitive commitments will ensure that Amazon will not use seller data on its marketplace for its own retail activities and that Amazon will grant non-discriminatory access to the “Buy Box”. and the Prime program. These commitments are legally binding on Amazon.
The commitments offered cover all of Amazon’s current and future marketplaces in the European Economic Area. They exclude Italy with regard to the commitments relating to the “Buy Box” and to Prime, taking into account the decision of the Italian competition authority of November 30, 2021 imposing corrective measures on Amazon with regard to the Italian market.
The definitive commitments will remain in effect for seven years with respect to Prime and the display of the second competing offer of the “Buy Box”, and for five years for the other parts of the commitments. Under the supervision of the Commission, an independent trustee will be responsible for monitoring the implementation and compliance with the commitments.
A fine of up to 10% of Amazon’s turnover
If Amazon were to breach the commitments, the Commission could fine it up to 10% of its total annual turnover, without having to prove any breach of EU competition rules or a fine of 5% per day of Amazon’s daily turnover for each day of non-compliance.
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Agreement between Amazon and Europe on its e-commerce practices fought as anti-competitive
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