The European Commission accepts Amazon’s commitments and closes its investigation

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The Commission has accepted Amazon’s commitments in relation to Prime, Buy Box and the use of third-party seller data

The European Commission accepts Amazon’s commitments and closes its investigation
March 23, 2023

On December 20, 2022, the European Commission accepted Amazon’s binding commitments and closed the investigation launched in July 2019 concerning the use - by Amazon - of information obtained from sellers using its platform, as well as Buy Box and Amazon Prime’s criteria.

The investigation

In July 2019, the European Commission opened a formal investigation against Amazon regarding its use of third-party data obtained thanks to its role of operator of its marketplace.

In November 2020, the European Commission initiated a second investigation concerning Amazon’s criteria to select the Buy Box winner and to participate in the Amazon Prime program.

In both instances, the European Commission considered a potential abuse of Amazon’s dominant position in its dual role as marketplace operator and distributor.

The European Commission considered that Amazon’s conduct could constitute an abuse of a dominant position

The Commission concluded that Amazon held a dominant position in the market for the provision of marketplace services for retailers in Germany, France and Spain. Amazon allegedly abused its dominant position through three types of conduct: 

  • The use of third-party seller data. As the platform operator, Amazon had access to third-party seller data (including transaction listings). Amazon used such non-public commercial data to make its own strategic decisions as a seller competing with third-party sellers. Specifically, communicated third-party sellers’ sales data were directly communicated to Amazon’s automated tool to make operational decisions. In the Commission’s view, this prevented effective competition between Amazon and third-party sellers on the platform.
  • The Buy Box winner selection criteria. On Amazon’s platform, several sellers compete for the sale of the same product. According to the operating conditions, if buyers do not choose a specific seller for the product they wish to purchase, by clicking the “Add to Cart” or “Buy Now” buttons, the purchase is awarded to the seller leading the Buy Box, thus making competing offers invisible. Although Amazon claimed that the selected seller corresponded to the best offer (in terms of prices, delivery times, and quality), the Commission concluded that the selection criteria unduly favored Amazon’s retail activities as well as sellers that used Amazon’s logistics and delivery services.
  • The Prime label selection criteria. Among other benefits, the Prime loyalty program allows free and faster delivery. To obtain the Prime label (which usually generates more sales), third-party sellers must meet certain requirements. For instance, delivery can only be made through Amazon’s chosen supplier and under Amazon’s conditions. The Commission confirmed that Amazon could establish selection criteria aimed at ensuring the quality of the Prime service. However, in this case, the Commission concluded that the criteria actually employed by Amazon entailed unequal treatment between independent sellers using Amazon’s logistics and delivery services and other third-party sellers. 

Amazon’s commitments

The European Commission closed the investigation without sanction in a commitment decision. Under the final version, Amazon committed to: 

Regarding the use of third-party seller data:

  • Not to use non-public data relating to, or derived from, the independent sellers' activities on its marketplace, for its retail business.

Regarding Buy Box winning offer selection criteria:

  • To ensure equal treatment of all sellers when ranking the offers for the selection of the Buy Box winner.
  • To display a second competing offer to the Buy Box winner if it is sufficiently differentiated from the first one on price or delivery. In both cases, the platform will display the same descriptive information and the same purchasing experience.

Regarding Prime access conditions:

  • To set non-discriminatory conditions and criteria for the qualification of sellers and Prime offers.
  • To ensure that Prime sellers can freely choose their carrier and negotiate the terms with it.  In this regard, Amazon must provide the means for independent carriers to contact customers on its platform.
  • Not to use for its own logistics services information obtained through Prime about the terms and performance of third-party carriers.

On the other hand, and to ensure the effectiveness of the above commitments, Amazon has also undertaken, among other things, to:

  • Increase the transparency and information flows about the commitments.
  • Introduce a centralized complaint mechanism open to all sellers and carriers in case of suspected non-compliance with the commitments.
  • Improve carrier data protection from use by Amazon’s competing logistics services, in particular concerning cargo profile information.

The commitments relating to Prime and Buy Box will remain in force for seven years and six months, while the remaining commitments have a term of five years and six months.

In recent months, both the European Commission and the Spanish Markets and Competition Commission (CNMC) have concluded several cases with commitment decisions. On the one hand, the European Commission has finalized cases in the pharmaceutical (Aspen), telephone (T-Mobile CZ, CETIN and O2 CZ) and insurance (Insurance Ireland) sectors with commitment decisions. On the other hand, the CNMC has concluded the cases opened against the Bar Association of Tenerife, ISDIN and DKV with commitment decisions.
March 23, 2023