Amazon faces competition inquiry amid abuse of power fears by City watchdog

Amazon faces competition inquiry amid abuse of power fears by City watchdog

July 6, 2022

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It follows a similar probe launched by the European Commission in May. Amazon’s Marketplace matches third- party sellers with customers on its website. Shoppers might not always be aware that what they are buying is from Amazon itself, or a third-party seller. These sellers can pay the firm extra for its Fulfilment by Amazon service, which handles everything from storing to packing and delivering their products.

The Competition and Markets Authority, which has not reached any conclusions at this stage, will consider whether Amazon has a “dominant position in the UK”.

It will also assess whether the company is “abusing that position and distorting competition” by giving an “unfair advantage to its own retail business or sellers that use its services”.

Among the three main thrusts of the probe is how Amazon collects and uses data from third-party sellers.

Sarah Cardell, general counsel at the CMA, said: “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.”

The CMA said it wanted to also establish how Amazon sets the eligibility criteria for selling under its Prime label – the paid-for option that offers customers free or faster delivery.

Amazon said: “We will work closely with the CMA although we believe we have always worked hard to help small businesses selling on Amazon to succeed, which is in both their and our best
interests. We remain proud of the continued support we provide to businesses of all sizes across the UK.”

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