January 9, 2023
The European Commission has made commitments offered by Amazon legally binding under EU antitrust rules. Amazon’s commitments address the Commission’s competition concerns over Amazon’s use of non-public marketplace seller data and over a possible bias in granting sellers access to its “Buy Box” and “Prime “programmes.
In July 2019, the Commission opened a formal investigation into Amazon’s use of non-public data of its marketplace sellers. On 10 November 2020, the Commission adopted a Statement of Objections in which it preliminarily found Amazon dominant on the French and German markets in relation to the provision of online marketplace services to third-party sellers. It also found that that Amazon’s reliance on marketplace sellers’ non-public business data to calibrate its retail decisions distorted fair competition on its platform and prevented effective competition.
On 10 November 2020, the Commission also opened a second investigation to assess whether the criteria that Amazon sets to select the winner of “Buy Box” and to enable sellers to offer products under its Prime programme lead to preferential treatment of Amazon’s retail business or of sellers that use Amazon’s logistics and delivery services. The Commission preliminarily concluded that Amazon abused its dominance on the French, German and Spanish markets for the provision of online marketplace services to third-party sellers.
The Commission also preliminarily concluded that Amazon’s rules and criteria for “Buy Box” and “Prime” unduly favour its own retail business, as well as marketplace sellers that use Amazon’s logistics and delivery services.
To address the Commission’s competition concerns in relation to both investigations, Amazon initially offered the following commitments:
- to address the data use concern, Amazon proposed to commit:
- not to use non-public data relating to, or derived from, the independent sellers’ activities on its marketplace, for its retail business; this applies to both Amazon’s automated tools and employees that cross-use the data from Amazon Marketplace for retail decisions; and
- not to use such data for the purposes of selling branded goods as well as its own-brand products;
- to address the “Buy Box” concern, Amazon proposed to commit to:
- treat all sellers equally when ranking offers for the purposes of selecting the “Buy Box” winner; and
- display a second competing offer to the “Buy Box” winner if there is a second offer from a different seller that is sufficiently different from the first one on price and/or delivery; both offers will display the same descriptive information and provide the same purchasing experience;
- to address the “Prime” concerns, Amazon proposed to commit to:
- set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers in relation to “Prime”;
- allow “Prime” sellers to freely choose any carrier for their logistics and delivery services and negotiate terms directly with the carrier of their choice; and
- not use any information obtained through “Prime” on the terms and performance of third-party carriers for its own logistics services.
The Commission then market tested the commitments and consulted on whether the commitments removed competition concerns. In response to the outcome of the market test, Amazon amended its initial proposals and committed to:
- improve the presentation of the second competing “Buy Box” offer by making it more prominent and to include a review mechanism if it did not attract adequate consumer attention;
- increase transparency and early information flows to sellers and carriers in relation to the commitments and their newly acquired rights, enabling sellers to switch to independent carriers;
- set out means for independent carriers to directly contact their Amazon customers, in line with data protection rules, enabling them to provide equivalent delivery services to those offered by Amazon;
- improve carrier data protection in relation to use by Amazon’s competing logistics services, e.g. in relation to cargo profile information;
- increase the powers of the monitoring trustee by introducing further notification obligations;
- introduce a centralised complaint mechanism, open to all sellers and carriers in case of suspected non-compliance with the commitments; and
- increase the duration of the commitments relating to “Prime” and the second competing “Buy Box” offer from five to seven years.
The Commission has decided that Amazon’s final commitments will ensure that Amazon does not use marketplace seller data for its own retail operations and that it grants non-discriminatory access to “Buy Box” and “Prime”. The Commission has therefore decided to make the commitments legally binding on Amazon.
The commitments cover all Amazon’s current and future marketplaces in the European Economic Area. They exclude Italy in respect of the commitments relating to “Buy Box” and “Prime” in view of the decision of 30 November 2021 of the Italian competition authority imposing requirements on Amazon regarding the Italian market.
The final commitments will remain in force for seven years in relation to “Prime” and the display of the second competing “Buy Box” offer, and five years for the remaining parts of the commitments. An independent trustee will oversee implementation and compliance with the commitments under the Commission’s supervision.
If Amazon breaches the commitments, the Commission can impose a fine of up to 10% of Amazon’s total annual turnover, without having to find an infringement of EU antitrust rules, or a periodic penalty payment of 5% per day of Amazon’s daily turnover for every day of non-compliance. To read the Commission’s press release in full, click here.