The regulator was concerned about Amazon’s dual role as each a market and a competitor to sellers selling on its platform.
Nathan Stirk | Getty Images
Amazon on Tuesday agreed to make some significant changes to its European operations as a part of the settlement of antitrust investigations that would have resulted in heavy fines for the e-commerce titan.
European Commission, the manager body of the EU, announced on Tuesday that Amazon has made quite a few commitments to handle allegations that the corporate is using third-party retailer data to its advantage.
related investment news
The regulator expressed concern about Amazon’s dual role as each a market and a competitor for sellers selling on its platform. Amazon, for its part, claims to be a support for small businesses within the region.
In November 2020, the Commission issued a Statement of Objections to Amazon over the “systematic” use of personal business data from independent sellers to profit its own retail operations.
It also launched a second investigation into claims that the standards set by Amazon to pick out featured sellers in its “buy box” tool and permit sellers to supply products to users of its Prime membership program gave preferential treatment to Amazon’s retail operations or self-service sellers.
On Tuesday, the commission said Amazon had given assurances that it might change a few of these practices. One in every of the commitments was to stop using non-public data about independent sellers in its retail operations or to sell branded goods and personal label products.
The corporate has also agreed to display a second purchase box when there may be a second offer that differs from the primary when it comes to price or delivery, and to permit Prime sellers to decide on any carrier for his or her logistics or delivery services.
The changes only apply to the European Economic Area. In Italy, Amazon has agreed separate legal remedies with the NCA for Buy Box and Prime. Amazon could have until June 2023 to implement the changes, which will probably be in place for five to seven years.
“Today’s decision sets out the principles Amazon could have to play by in the long run, quite than setting those rules for all players on its platform,” Margrethe Vestager, EU competition chief, said in a speech on Tuesday.
“With these latest rules, competing independent retailers, carriers and European customers could have more options and selection.”
If found guilty, the corporate could face a high quality of as much as 10% of its global annual revenue. For Amazon, an organization that generated $469.81 billion in revenue in 2021, this might mean a record $47 billion penalty.
Nonetheless, the EU can still high quality Amazon 10% of its total annual turnover if it fails to fulfill its obligations, or a periodic penalty of 5% per day of every day turnover for every day of non-compliance.
Amazon said in a press release that it was “satisfied that we’ve taken into consideration the concerns of the European Commission and addressed these issues.”
“While we still disagree with several of the European Commission’s initial conclusions, we’ve engaged constructively to be sure that we are able to proceed to serve customers across Europe and support the 225,000 European small and medium-sized businesses selling through our stores,” Amazon said in a comment. a spokesman told CNBC by email.
This development marks a subtle victory for the EU, which is in search of seismic changes within the business models of US tech giants through the Digital Markets Act. The laws, which got here into force last month, goals to stop so-called “watchdog” firms from abusing their market power to harm smaller rivals.
For a few of these firms, that is already making a big difference. Applefor instance, it’s reportedly working on changes that will allow users to “load” apps from the net bypassing the App Store to make sure its DMA compliance.