Retail giant Amazon is being investigated over concerns around anti-competitive practices.
The Competition and Markets Authority (CMA) is looking into whether Amazon may be giving an "unfair advantage" to itself and sellers that pay for its services - meaning shoppers might lose out. This could mean consumers pay more for items, are offered lower-quality goods or end up paying more for something.
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The issue is that some of the products on Amazon’s Marketplace are supplied by Amazon itself, with others coming from independent sellers. Some of these sellers pay for Amazon services, such as storage, packaging and delivery, the Mirror reports.
The competition watchdog is looking into whether Amazon prioritises its own items and those from sellers that pay Amazon.
The CMA said its investigation "will consider whether Amazon has a dominant position in the UK and whether it is abusing that position and distorting competition by giving an unfair advantage to its own retail business or sellers that use its services, compared to other third-party sellers on the Amazon UK Marketplace".
CMA general counsel Sarah Cardell 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. Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items or having less choice."
The investigation will look at three main areas:
- How Amazon collects and uses third-party seller data - and if this gives it an unfair advantage
- The way Amazon picks sellers for its ‘Buy Box’, which lets customers buy items with one click
- How Amazon picks Prime items, which can get perks like free and fast delivery
The European Commission has already opened two investigations into the same issues. The CMA will work with the Commission as it carries out its own probe.
An Amazon spokesperson said: “We will work closely with the CMA during their investigation, although we believe we’ve always worked hard to help small businesses selling on Amazon to succeed, which is in both their and our best interests. We remain proud of the continued support we provide to businesses of all sizes across the UK.
"More than 50% of all products sold on Amazon are from small businesses, and sales from our selling partners continue to grow faster than Amazon’s retail sales. There are now more than 65,000 small and medium-sized business in the UK that sell on Amazon, supporting more than 175,000 jobs across the country.”
Alongside this case, the CMA also has an open investigation into Amazon and Google, under consumer protection laws. This is looking into whether they have done enough to tackle fake reviews on their sites. The UK competition watchdog has not yet decided if Amazon or Google have broken any laws.
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