Amazon has agreed to give merchants operating in the European Union more access to valuable real estate on its website, the European Commission said Tuesday, in a deal that ends antitrust investigations by regulators that the company said it used its size and power to stifle competition in the bloc.
The settlement helping Amazon avoid what could have been a multibillion-dollar fine while giving the European Commission, the European Union’s executive branch, a victory in delivering long-sought changes to the world’s dominant online shopping platform. According to the deal, the company would also be prohibited from using non-public information it collects about independent merchants to inform Amazon of its own product selection.
The deal is an attempt to put more walls between Amazon’s roles as a digital store that many merchants depend on to reach customers and as a manufacturer of products that often compete with those outside sellers. The dual roles created a conflict of interest, critics say, allowing Amazon to favor its own products and services over smaller competitors that have few other ways to reach customers online.
“Today’s decision sets new rules for how Amazon runs its business in Europe,” said Margrethe Vestager, executive vice president of the European Commission, which oversees digital policy and antitrust enforcement. “Amazon can no longer abuse its dual role and will have to change several business practices.”
She added: “Competitive independent retailers and carriers, as well as consumers, will benefit.”
An Amazon spokesman said the company was “pleased that we have responded to the European Commission’s concerns”.
“While we continue to disagree with some of the preliminary conclusions reached by the European Commission,” the spokesperson said, “we have engaged constructively to ensure we can continue to serve customers across Europe and support Europe’s 225,000 small and medium-sized businesses that sell through our stores.”
Already considered the most active regulator of the technology industry in the world, the European Union is now acting even more aggressively. On Monday, antitrust regulators filed charges against Meta that could lead to billions of dollars in fines for anti-competitive practices related to its commodity marketplace service. Apple and Google are also being investigated for possible antitrust violations.
Companies are also racing to comply with new EU laws targeting the tech sector that come into effect by 2024. The rules give regulators even more power to crack down on what is seen as anti-competitive business practices and force social media companies to more actively police user-generated content.
The deal with Amazon announced Tuesday is closely related to a prior deal announced in July. Under the agreement, Amazon agreed to:
Give independent merchants equal access to the buy box – the purchase area with prominent buttons in the product listing that prompt customers to ‘Buy Now’ or ‘Add to Cart’. Amazon said it will create a second bid box if there is a sufficient difference in price or delivery time.
Stop using non-public data about merchants who sell on its website, including terms of sale, revenue and inventory, that Amazon can use to make decisions about what competing products to create, sell and advertise.
Allow third-party sellers to participate in Amazon’s Prime program, even if they don’t use Amazon’s fulfillment business, if they meet certain delivery and service reliability standards.
The agreement lasts for five years and legally applies only to Amazon’s operations in the European Union.
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