Amazon faces investigation by UK's watchdog over anti-competitive concerns

Britain's competition watchdog is investigating whether Amazon is harming competition and hurting consumers by giving an unfair advantage to merchants that pay for extra services.

The Competition and Markets Authority's formal investigation said Wednesday that it will look into concerns that the ecommerce giant is abusing its dominance to undermine rivals, echoing similar investigations carried out by the European Union's executive Commission and Germany's antitrust agency.

Amazon said it will work closely with the CMA during the investigation.

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," the company said.

We remain proud of the continued support we provide to businesses of all sizes across the U.K."

While Amazon supplies some of the products that it sells online, many others are from third-party merchants and retailers, and provides them with essential services to make sales.

The Markets Authority said it will consider whether Amazon gives an unfair edge to merchants using optional services that cost extra, including storage, packaging and delivery.

With millions of customers in Britain, 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," the watchdog's general counsel, Sarah Cardell, said in a prepared statement.

It's also important to have a competitive market for British merchants selling on Amazon, Cardell said.

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 investigation will focus on how Amazon chooses suppliers for the so-called Buy Box, which shows customers one-click Buy Now or Add to Basket" options.

Also under scrutiny is the eligibility criteria for offers under the premium Prime label and the collection and use of data.

Subject to new, and tougher rules in Germany

Amazon.com became the third US tech giant subject to Germany’s tough new antitrust rules that target the dominance of a handful of powerful digital firms, the nation’s watchdog ruled.

Germany’s Federal Cartel Office on Wednesday said more than every second euro in German online retail is being spent on Amazon making its market position dominant. 

“Amazon is the key player in the field of e-commerce,” Andreas Mundt, the office’s chief, said. The decision means “that we can target and prevent potentially anti-competitive behavior by Amazon more effectively than before.” Meta Platforms’s Facebook and Alphabet and its Google unit are already subject to the tougher regime. The rules allow Mundt’s office to step in earlier and more effectively when it sees anti-competitive behaviour (Bloomberg).