Amazon agrees to change its marketplace rules to address competition regulators’ concerns

Amazon will give independent sellers’ equal chance of appearing in the ‘Buy Box’ when they compete with Amazon’s own products.

The Competition and Markets Authority (CMA) launched an investigation in July 2022 over concerns that Amazon was abusing its dominant position as the UK’s leading online retailer. It raised concerns that Amazon was not featuring other sellers’ products when it had similar products to sell from Amazon or from third-party sellers that use Amazon’s delivery services. 

Amazon has responded by saying it will now treat all sellers’ equally when selecting which to feature in the ‘Buy Box’. The ‘Buy Box’ (also known as the ‘Offer Display’) is displayed prominently on Amazon’s product pages and provides customers with options to ‘Buy Now’ or ‘Add to Basket’ in relation to items from a specific seller.

The regulator also raised concerns about Amazon’s use of commercially sensitive data from other sellers to gain unfair competitive advantage, which Amazon has also said it will stop doing.

The commitments from Amazon are being viewed by the regulator as giving sellers a fairer chance of having their products prominently displayed to customers. Ann Pope, Senior Director for Enforcement at the CMA, said:

‘Amazon’s commitments to the CMA will help ensure that third-party sellers on Amazon Marketplace can compete on a level playing field against Amazon’s own retail business and, ultimately, mean that customers in the UK get a better deal. The CMA took this action after it heard concerns that Amazon was using its strength in the market to gain advantage over thousands of businesses which use Amazon Marketplace to reach customers.’

The regulator is now consulting on the commitments made by Amazon before deciding whether to accept them. It will close this consultation on 1 September 2023.

Amazon disagrees with concerns raised by the regulator

Amazon has said it disagrees with the regulators’ concerns. A spokesperson for Amazon said:

‘While we disagree with the CMA’s preliminary concerns, we have engaged constructively with them to address the matters they have raised and to preserve our ability to serve UK customers and the more than 100,000 UK-based small and medium-sized businesses selling through our UK store. We are extremely proud of the work we’ve done to support our sellers’ success over the past two decades.’

Consumer ‘Buy Box’ lawsuits against Amazon

Amazon is facing two competing multi-million-pound consumer lawsuits for favouring its own products. 

Consumer advocates Julie Hunter – represented by law firm Hausfeld & Co. LLP – and Richard Hammond – represented by Charles Lyndon – have filed claims to seek compensation for consumers affected by this alleged conduct. Regardless of what commitments are agreed following the regulator’s intervention, no consumer would be compensated for any loss they may have suffered.  

Both firms were asked to comment on these latest developments. A spokesperson from the Charles Lyndon team said:

‘The CMA reports that Amazon will, amongst other things, guarantee that it will treat its sellers’ product offers equally when it decides which offer is placed in the Buy Box. Our client, Robert Hammond, welcomes Amazon’s proposal and we look forward to seeing how the platform operates going forwards.

However, Amazon’s proposals do not detract from our client’s allegations that, between at least October 2015 and June 2020, Amazon did not treat their sellers’ product offers equally when deciding which one to place in the Buy Box. This was to the detriment of UK consumers, who deserve to be compensated for any losses suffered when shopping on Amazon; that is why our client is bringing the collective action.’

The two claims are being reviewed by the specialist competition court – the Competition Appeal Tribunal – and a decision about which will proceed is likely to be made in the Autumn.

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