Amazon is off to a rough start. Following the European Union's (EU) directive for Amazon to amend their Prime service cancellation mechanism, they are about to face one of their biggest investigations yet.
Amazon Catches The Attention of British Authorities for Alleged Anti-Competitive Behavior
Amazon, an American multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence, is now under fire for the reported marketplace malpractices. On Wednesday, July 6, the British antitrust authority announced that it is looking into whether the American e-commerce behemoth is undermining competition by giving its own sellers and retail business an undue edge over other merchants on its platform.
Amazon's tactics tend to affect sellers on its domestic marketplace to maintain preference over the components of their e-commerce platform. This, according to Britain's trust regulatory arm, Competition and Markets Authority (CMA), can be considered anti-competitive behavior, which could incur problematic issues for customers. According to Sarah Cardell, General Counsel at the Competition and Markets Authority (CMA), it is only justified to look into whether Amazon is taking advantage of third-party data to prioritize their own retail business over others. They also added that at present, Amazon's setup favors merchants that use Amazon's logistics and delivery services which could, in consequence, dampen competition.
Amazon's rapid delivery system is already being utilized by millions of consumers in Britain, according to CMA. Through its own retail division, Amazon offers goods through the marketplace. But it also permits things to be sold by independent retailers. These businesses can take advantage of Amazon's services, which include logistical support and customer matching. According to the company, the business will make sure to provide full cooperation with the CMA amid investigations.
UK Plans on Investigating if Amazon has Followed Requirements for their 'Prime' Name
CMA's statements show that it has already reached out to the European Commission (EC) to assist in the investigations. According to them, the case can be considered a continuation of EC's existing case with Amazon. Three main objectives will guide the CMA's examination. The first is how and to what extent Amazon gathers and uses data from third-party sellers and whether this offers Amazon an unfair advantage in its choices about its retail operations.
The CMA will examine how Amazon determines which suppliers are the preferred or first choice in the "Buy Box," which is a section on Amazon's product pages that offers shoppers a one-click option to "Buy Now" or "Add to Basket." Last but not least, the British authority will examine how Amazon establishes the requirements for selling under the Prime name. Fast delivery and access to additional products are two benefits of Prime, an Amazon subscription service that costs money.
Amazon also figured itself on an antitrust issue back in November 2020. In this case, the European Union (EU) alleged that Amazon was making steps that kill competition amongst other online retail market participants. This prompted EU to launch its second inquiry into the firm's operations. Separately, just last Wednesday, Germany also imposed stricted monitoring guidelines to curb potential antitrust issues on Amazon.
