Amazon.com Inc. has settled two antitrust investigations launched by the European Commission, the European Union’s executive branch, into its e-commerce marketplace.
The development was announced today. As part of the settlement, Amazon will modify several business practices that drew antitrust scrutiny.
Amazon enables third-party merchants to sell their products through its e-commerce platform. In some cases, Amazon competes with those third-party merchants by offering rival products. This business practice was the focus of the first EU antitrust investigation that Amazon settled today.
In 2019, the EU began investigating whether Amazon had used non-public data about third-party merchants to give its competing products an unfair edge. As part of the settlement announced today, Amazon has pledged not to use such data to benefit its competing products. Information covered under the commitment will not be accessible to the company’s employees or automated tools.
The second EU antitrust probe that Amazon has settled originally launched in 2020. It focused on the company’s Prime membership program, which enables users to access discounts and other benefits in exchange for a monthly fee.
For third-party merchants, offering a product through Prime can increase sales. Amazon has pledged to “set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers to Prime,” the EU stated today.
Third-party merchants can ship merchandise to customers using a logistics service provided by Amazon or with the help of external delivery companies. To settle the antitrust probe, Amazon will “allow Prime sellers to freely choose any carrier for their logistics and delivery.” Additionally, the company has pledged not to use data that it obtains through Prime about third-party delivery companies to benefit its own logistics service.
The EU investigation into Prime also scrutinized Amazon’s Buy Box feature. The feature is included in product listings on the company’s e-commerce marketplace. Using the Buy Box, consumers can quickly purchase an item or add it to their cart.
Often, multiple sellers offer the same product on Amazon. When such a situation emerges, only one of the sellers will be featured in the Buy Box. Appearing in the Buy Box can significantly increase a seller’s revenue because the feature makes the shopping experience more convenient for users.
As part of its settlement with the EU, Amazon has agreed to “treat all sellers equally when ranking the offers for the purposes of the selection of the Buy Box winner.” Additionally, the company will add a second Buy Box to product pages. The latter feature will display a “second offer from a different seller that is sufficiently differentiated from the first one on price and/or delivery.”
Many of the commitments that Amazon has pledged to make were originally proposed by the company in July. The company’s agreement with the EU expands the commitments in several ways.
Amazon has agreed to more prominently display the second Buy Box it plans to introduce, as well as create a review mechanism for ensuring the feature draws sufficient customer attention. Furthermore, the company will provide more information about its shipping policies to third-party merchants. Amazon will increase “transparency and early information flows” to third-party merchants, as well as to the external delivery companies with which they partner.
“Today’s decision sets new rules for how Amazon operates its business in Europe,” said European Commission Executive Vice President Margrethe Vestager. “Amazon can no longer abuse its dual role and will have to change several business practices. They cover the use of data, the selection of sellers in the Buy Box and the conditions of access to the Amazon Prime Programme.”
The business practices that Amazon has agreed to implement across its Prime program and the second Buy Box on product pages will remain in effect for at least seven years. The remaining commitments, in turn, will be upheld for at least five years.
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