Amazon Marketplace under investigation by watchdog over unfair advantage claims

The competition watchdog is formally examining Amazon’s treatment of the third-party sellers that use its retail platform.

The investigation by the Competition and Markets Authority (CMA) will look at whether the technology giant has a “dominant position in the market” and whether it uses this to give an unfair advantage to its own business and to those sellers who pay it for additional services.

Amazon Marketplace is a network that allows independent retailers to use Amazon’s retail platform to reach customers, with the company sharing in the profits from any sales. In addition, sellers using the site can buy extra services such as “Fulfilment by Amazon”, which handles some aspects of the logistical process on their behalf, including storage, packaging and delivery.

The authority’s investigation will look at three main areas: how Amazon collects and uses data from its sellers; the criteria that it sets for which products are listed first on the website; and how sellers are listed under the Prime label, Amazon’s loyalty programme that offers free and fast delivery.

The European Commission has previously looked into this issue and its investigation into similar concerns continues. It will liaise with the CMA on its findings.

On the issue of market influence, Germany’s antitrust watchdog, the Federal Cartel Office, said this morning that it considered Amazon to be dominant in its marketplace services for third-party merchants.

Sarah Cardell, general counsel at the CMA, said: “Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button. This is an important area so 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.

“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. A formal investigation will allow us to consider this matter properly.”

The watchdog also has an open investigation into Amazon and Google over concerns that not enough is being done to tackle fake reviews on their site.