Amazon and the European Commission (EC) today confirmed that the online giant has settled two EU antitrust cases by agreeing to dramatic behavioral changes. In doing so, Amazon avoided a hefty fine and what would certainly be years of expensive legal fees.
“The European Commission has made commitments offered by Amazon legally binding under EU antitrust rules,” the EC announcement explains. “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 to sellers access to its Buy Box and its Prime program.”
The EC had launched two separate investigations into Amazon’s abuses of its market power. The first started in July 2019, with the Commission examining Amazon’s use of the non-public data of its marketplace sellers to illegally enter new markets. And the second started in November 2020, with the EC looking into Amazon’s behavior of giving preferential treatment to those third-party sellers that used its in-house logistics and delivery services.
“The Commission 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,” the EC concluded. “[And] Amazon abused its dominance on the French, German and Spanish markets for the provision of online marketplace services to third-party sellers … [by] unduly favoring its own retail business, as well as marketplace sellers that use Amazon’s logistics and delivery services.”
As for the settlement, Amazon has agreed to not use non-public third-party selling data to sell branded goods under its own labels based on what products are selling well. It will treat all third-party sellers equally, regardless of whether they use Amazon’s logistics and delivery services. And it will not discriminate against third-party sellers that wish to offer products through Prime. The EC says it tested these conditions between July and September 2022 with all interested third parties to determine whether they would address their competition concerns.
“The Commission found 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 decided to make them legally binding on Amazon,” the announcement explains. “The 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.”
Should Amazon breach its commitments, the EC could impose a fine of up to 10 percent of Amazon’s total annual revenues or a periodic penalty payment of 5 percent per day of Amazon’s daily revenues for every day of non-compliance.
News of the settlement leaked last week when The Financial Times and The New York Times both reported independently, with each citing multiple sources.