Amazon has been indicted by the European Commission of misusing the positions of both marketplace operator and retailer. The European Commission went on to assert that they (Amazon) outsmart smaller vendors by using sales data collected from them. To proffer a solution to this and broker peace, the European commission prescribed that Amazon “restrain from using collected non-public data relating to these smaller vendors that are independent on its marketplace.
Amazon has long since been on the radar of the European Commission since it uses insight on its platform to create a replication of hot and sought-after products like PeakDesign bags and Allbirds shoes. However, the investigation has looked at more options that Amazon could explore with this data.
Adding to the acknowledgement of data, Amazon is making plans on how to sell products to A-list subscribers and also employing the feature of “Buy Box” which allows customers to add an item to their cart or buy immediately. With Buy Box, only one vendor can be featured making it hot cake after real estate. Investigators from the EU claimed that Amazon is unbiased and doesn’t only favour its products but encountered issues building a case against the company. In a bid not to be preferential, Amazon is committing to “apply equal treatment to all its vendors when ranking their offers for the purposes of the selection of the winner of the Buy Box and also adding a second “Buy Box” for products that have a difference in price and/or delivery.
Amazon is also willing to allow third-party vendors to offer Prime delivery times without having to use their own logistics service and committing “not to use information regarding third-party vendors obtained through Prime. It goes without saying that Amazon has agreed to not use private data it garners from vendors to compete with them.
These acknowledgements make up the market test that needs to be finalized before Amazon implements any change. The European Commission is asking Amazon’s competitors to assess the company’s commitments and offer feedback before September 9th. A deal is in view notwithstanding necessary adjustments that might or might be made in the agreement.
This pact allows both Amazon and the EU to bag some claims owing to the success of the probe. Amazon gets to evade a multi-billion dollar fine, while the commission gets to make tangible changes to the company’s platform that will influence the world of online retail. This settlement also abjures unavoidable court cases that will cause a major scandal in the Tech world.
Whilst this settlement announced is Amazon’s response to a year-old antitrust investigation, it also puts in perspective and looks forward to the EU’s Digital Markets Act (DMA) which is expected to flag off in 2024. This act is intended to leverage the digital field and also includes requirements for companies like Amazon to share more data with clients.
According to a TechCrunch report, Amazon said it had “serious concerns” about the DMA and vehemently disagrees with the EU’s conclusions in this case but also went on to say that it has engaged with the commission to discuss its concerns and preserve its ability to serve European customers”.