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Amazon’s EU pledges to be legally binding

20 Dec 2022 / eu Print

Amazon’s EU pledges to be legally binding

The European Commission has accepted commitments made by tech giant Amazon to address a number of competition concerns.

Its concerns centre on Amazon’s role as an operator of a marketplace that is used by the company itself, as a retailer, as well as independent sellers.

The EU body says that the commitments will be made legally binding under EU competition rules, with an independent trustee in charge of monitoring implementation and compliance.

Margrethe Vestager, the commissioner in charge of competition policy, said that the decision set new rules for how Amazon operated its business in Europe.

“Amazon can no longer abuse its dual role, and will have to change several business practices,” she stated.

Use of non-public data

The commission had opened separate investigations into Amazon's use of non-public data on marketplace sellers, and into a possible bias in granting sellers access to its Buy Box and its Prime programme.

Buy Box shows an offer from one single seller, while the Prime programme offers premium services to customers for a monthly or yearly fee, and allows independent sellers to sell to Prime customers under certain conditions.

The EU body preliminarily concluded that Amazon had abused its dominance in the French, German and Spanish markets for the provision of online marketplace services to third-party sellers.

It also found that Amazon's rules and criteria for the Buy Box and Prime unduly favoured its own retail business, as well as marketplace sellers that used Amazon's logistics and delivery services.

Proposals amended

Amazon has now offered a number of commitments to address the EU’s concerns, having amended its initial proposals after a consultation process earlier this year.

The commission says that Amazon will:

  • Improve the presentation of the second competing Buy Box offer by making it more prominent, and including a review mechanism in case the presentation is not attracting adequate consumer attention,
  • Increase the transparency and early information flows to sellers and carriers about the commitments and their newly acquired rights, enabling, amongst others, early switching of sellers to independent carriers,
  • Lay out the 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 from use by Amazon's competing logistics services, in particular concerning 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.

The commitments that relate to the Buy Box display and Prime will last for seven years, rather than the five initially proposed.

The commission said that Amazon's final commitments would ensure that the company did not use marketplace-seller data for its own retail operations, and that it granted non-discriminatory access to Buy Box and Prime. 

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