Amazon.com Inc. has offered to change some of its business practices to address antitrust concerns raised by European Union regulators.
The European Commission, the EU’s executive arm, announced the development today.
Amazon enables third-party merchants to sell their products on its e-commerce marketplace. Amazon also sells its own products on the marketplace and, in some areas, competes with third-party merchants. The first set of commitments that the company has proposed to address antitrust concerns focuses on this aspect of its business.
Amazon collects data about third-party merchants who sell products on its marketplace. Two years ago, the European Commission launched an investigation to determine if Amazon may be using data about third-party sellers to gain an unfair competitive advantage. The commission later issued a formal statement of objections over the matter.
As part of the proposed commitments announced today, Amazon has pledged to “refrain from using non-public data relating to, or derived from, the activities of independent sellers on its marketplace, for its retail business that competes with those sellers,” the European Commission stated. The data in question covers details such as a third-party merchant’s revenue, sales terms and inventory levels.
Besides Amazon’s data practices, EU officials have also been investigating its Buy Box feature and Prime program. The Buy Box is a panel that appears next to an Amazon product listing and enables shoppers to purchase the product quickly using a “Buy Now” button. Prime is the membership program through which users can access benefits such as free shipping and discounts.
There are situations where the same product is offered by multiple third-party sellers on Amazon. When that’s the case, only one seller is featured in the Buy Box. Appearing in the Buy Box can provide a significant revenue boost for online retailers because the feature enables shoppers to make a purchase more conveniently.
As part of its commitments, Amazon has pledged to “apply equal treatment to all sellers when ranking their offers for the purposes of the selection of the winner of the Buy Box.” Furthermore, the company is promising to display a second, competing offer next to the offer of the seller featured in the Buy Box if certain conditions are met.
“Both offers will display the same descriptive information and provide for the same purchasing experience. This will enhance consumer choice,” the European Commission stated.
The third set of commitments proposed by Amazon focuses on the Prime membership program. Amazon has pledged to “set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers to Prime.” Additionally, Prime sellers will have the option to use third-party logistics services to ship their merchandise.
Amazon’s commitments address the possibility that data about a third-party logistics service used by a Prime seller might be collected by its systems. In such a situation, Amazon won’t use the collected data to improve its competing logistics offerings.
Amazon told TechCrunch in a statement that “we have engaged constructively with the Commission to address their concerns and preserve our ability to serve European customers and the more than 185,000 European small and medium-sized businesses selling through our stores. No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
The European Commission has invited interested parties to submit feedback about Amazon’s commitments until Sept. 9. If the commitments are accepted, they will remain in effect for five years.