LONDON (BBC News): Amazon is under investigation in the UK over concerns that the company is giving an unfair advantage to certain sellers on its marketplace.
The markets watchdog said that Amazon’s practices may be anti-competitive and leading to worse deals for customers.
The investigation will centre on how Amazon decides which products are given preferential listing spots.
Amazon said it believed it had always worked hard to help small businesses selling on Amazon to succeed.
This investigation by the Competition and Markets Authority (CMA) follows a similar probe launched by the European Commission in May.
The online retail giant not only hosts the marketplace where independent businesses can advertise their products, but it also sells its own products there too.
According CMA, Amazon may be giving preference to its own retail business and disadvantaging third-party sellers.
The regulator also said that for a fee, Amazon offers services to these independent businesses – including storage, packaging, and delivery – and may be giving an unfair advantage to the sellers that purchase these services.
If the CMA decides, after concluding its investigation, that Amazon is guilty, then it has the power to impose a financial penalty or direct the company to change its practices.
Sarah Cardell, General Counsel at the CMA, said: “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.”
“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,” Ms Cardell said.
Thousands of UK businesses use Amazon to sell their products, she added.
“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.”
The CMA’s investigation will focus firstly on how Amazon collects third-party seller data, and whether it then uses this information to give itself an unfair advantage in relation to business decisions made by its retail arm.
Secondly, the probe will look in to how Amazon decides which suppliers are given preferred first choice in the “Buy Box”, a section displayed prominently on Amazon’s product pages. Being placed in the box provides customers with one-click options to “Buy Now” or “Add to Basket”.
Lastly, the regulator has promised to investigate how Amazon decides which products are eligible to be sold under the Prime label, giving them free and faster delivery.
A spokesperson for Amazon said: “We will work closely with the CMA during their investigation, although we believe we’ve 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.”
The CMA said it would seek to liaise with the European Commission as its own investigation in the UK progresses.
Alongside this case, the CMA also has an open investigation into Amazon and Google, over concerns that fake five star reviews on their websites could be misleading shoppers.
The watchdog is also worried that “law-abiding businesses” which sell over Amazon and Google may be losing out to firms using false recommendations.
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