Amazon is being investigated by the Competition and Markets Authority (CMA) over concerns that its UK Marketplace practices may be anti-competitive and affecting sellers.
The news comes a day after Amazon recruited Kris Jenner and her granddaughter Dream Kardashian to promote the Amazon Glow, a new device that helps connect families.
The investigation, part of a European Commission probe into similar concerns, will consider whether Amazon is abusing its dominant position and distorting competition by giving an unfair advantage to its own retail business or sellers that use its services.
A large proportion of the marketplace is supplied by third-party sellers.
The CMA added: “Amazon provides services to these sellers, including those that are essential to make sales, such as matching sellers with consumers. It also offers optional services that incur additional fees, such as Amazon’s ‘Fulfilment by Amazon’ service. This handles some aspects of the sales process, including storage, packaging, and delivery.”
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The investigation will focus on how the market collects and uses third-party seller data and how Amazon sets criteria for allocation of suppliers to be the preferred choice in the ‘Buy Box’. The eligibility criteria for selling under the Prime label will also be analysed.
“Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button,” CMA general counsel Sarah Cardell said.
“This is an important area so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services – both of which could weaken competition.”
“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. 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.”
“A formal investigation will allow us to consider this matter properly.”
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