UK watchdog opens investigation into Amazon’s marketplace practices

  • 7/6/2022
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The UK competition watchdog has launched an investigation into whether Amazon has been giving its own brands and those using its logistics services unfair advantage over third-party rivals on its online marketplace. The Competition and Markets Authority (CMA) said it opened an investigation on Tuesday amid concerns the US tech corporation’s practices on its UK marketplace may be anti-competitive and could result in a worse deal for customers. The move comes as a separate European Commission investigation looks at similar concerns. That inquiry will not cover any actions taking place in the UK after Brexit in December last year. The CMA said its investigation would focus on three main areas, including how Amazon collected and used third-party seller data and how it set the eligibility criteria for selling under its Prime label. The European Commission and UK investigations come after a string of reports alleging that Amazon used third party sellers’ data to copy products. The group has been accused of copying a small company’s line of camera tripods sold via Amazon and launching a shoe that appeared to closely match a bestseller for eco-friendly brand Allbirds. A Reuters investigation published last year based on leaked internal Amazon documents claimed that the group ran a systematic campaign to copy goods and manipulate search results to boost its own product lines in India. Andrew Goodacre, the chief executive of the British Independent Retailers Association (Bira), the trade body representing hundreds of independent retailers, said: “Independent retailers have told me in the past that working with Amazon is difficult, and they often feel that fast-selling products are often monitored by Amazon and quickly copied in their own retail business – but offered at even more competitive rates. “We have felt for a long time that Amazon has too much power and whilst independents welcome the sales, the actual profit margins achieved are minimal once Amazon has had its share.” Martin McTague, chair of the Federation of Small Businesses, said: “It is sometimes said that data is the new oil. When a handful of huge companies have a near-monopoly on this incredibly valuable resource, it’s vital that they do not crowd out smaller players.” Amazon 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.”

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