The European Commission announces that it accepts the commitments assumed by Amazon regarding certain practices considered anti-competitive. This concerns the prohibition of using the data of sellers present in its market, as well as the guarantee of equal access to the Buy Box (the “buy box”) and the Prime program.
New Rules of the Game for Amazon Data and Algorithms
The devil lives in the details, and we had to delve into each point to define the rules of the game for operators, retailers present in the marketplace and Amazon. The use of data and algorithms is at the heart of the issues. 🇧🇷 Until now, Amazon determined the rules applicable to all players on its platform. notes Margrethe Vestager, the European Commission’s executive vice president in charge of competition policy.
🇧🇷 With today’s decision, we define the rules that Amazon will have to follow in the future. The commitments will limit Amazon’s ability to abuse its role as a marketplace service provider, seller and operator at the same time. she continues. 🇧🇷 Competing retailers and independent operators, as well as consumers, will benefit immediately. she announces.
Amazon’s commitments respond to the Commission’s competition questions. This relates to Amazon’s use of non-public data from sellers in its marketplace and its possible bias in granting sellers access to its Buy Box and Prime program.
Amazon was distorting competition by using seller data on its platform
In November 2020, the Commission found that Amazon’s reliance on non-public trade data from active sellers in its marketplace to fine-tune its retail offerings distorted competition on its platform. At the same time, the Commission opened a second procedure to determine whether the criteria established by Amazon to select the “Buy Box” winner and allow sellers to offer products under its Prime program, led to preferring Amazon’s own sales or sellers that use Amazon’s logistics services.
The Commission outright concluded that Amazon’s rules applicable to the Buy Box and Prime program unduly favor its own retail activities, as well as active sellers in its marketplace who use Amazon’s logistics and delivery services. Faced with the European Commission, Amazon offered compromises. Regarding the use of data from sellers active in its marketplace, Amazon has proposed to refrain from using non-public data related to or derived from the activities of independent sellers in its marketplace, for its retail businesses that compete with those vendors.
This commitment applies to both Amazon’s automated systems and employees who may use Amazon Marketplace data to make retail decisions. Amazon has agreed not to use this data to sell branded products or sell products under its own brand.
Equal treatment of merchant access to Amazon’s “Buy Box”
As far as the “Buy Box” is concerned, Amazon proposed to apply equal treatment to all sellers when ranking their offers in order to select the winner of the “Buy Box”. Amazon offers to display a second offer competing with the “Buy Box” winner if there is a second offer from another seller sufficiently differentiated from the first in terms of price or delivery. Both offers will display the same descriptive information and offer the same purchasing possibilities.
With respect to Prime, Amazon has proposed establishing non-discriminatory terms and criteria for Prime eligibility of active marketplace sellers and offers. Amazon is committed to allowing sellers on Prime terms to freely choose carriers for their logistics and delivery services and to negotiate terms directly with the carrier of their choice. Finally, Amazon undertakes not to use, for its own logistical services, information obtained through Prime on the conditions and performance of third-party carriers.
Between July 14 and September 9, 2022, the Commission presented Amazon’s commitments to market participants and consulted with all interested third parties to verify that the proposed commitments would eliminate the identified competition concerns.
Best presentation of the 2nd competing offer of the ‘Buy Box’
In view of the results of this consultation, Amazon modified its initial proposal and committed to improving the presentation of the second competing offer of the “Buy Box” by making it more visible and providing for a revision mechanism in case the presentation does not attract enough attention. of the consumer. In addition, Amazon will increase transparency and advance information flows to sellers and carriers about commitments and their newly acquired rights, allowing, among other things, to quickly switch sellers to independent carriers.
Amazon will define the means for independent carriers to contact their Amazon customers directly, in accordance with data protection rules, in order to allow them to provide delivery services equivalent to those offered by Amazon. The US giant will improve the protection of carriers’ data against use by logistics services competing with Amazon, in particular with regard to information on load profiles.
Amazon will increase the powers of the monitoring agent by introducing new notification obligations. A centralized complaint mechanism will be created, open to all sellers and transporters in case of suspected non-compliance with commitments. Finally, it will increase to seven years, instead of the five years initially proposed, the duration of the commitments relating to Prime and the second competing offer of the “Buy Box”.
Non-discriminatory access to the “Buy Box” and Prime program
Ultimately, the Commission finds that Amazon’s definitive commitments will ensure that Amazon will not use seller data in its marketplace for its own retail activities and that Amazon will grant non-discriminatory access to the “Buy Box” and Prime program. These commitments are legally binding on Amazon.
The commitments offered cover all of Amazon’s current and future markets in the European Economic Area. They exclude Italy with regard to the commitments regarding the “Buy Box” and Prime, taking into account the decision of the Italian competition authority of 30 November 2021 imposing corrective measures on Amazon in relation to the Italian market.
The definitive commitments will be in effect for seven years with respect to Prime and the airing of the second competing “Buy Box” offer, and for five years for the remaining installments of the commitments. Under the supervision of the Commission, an independent trustee will be responsible for monitoring the implementation and fulfillment of the commitments.
Fine of up to 10% of Amazon billing
If Amazon did not meet the commitments, the Commission could fine it up to 10% of its total annual turnover, without having to prove any breach of EU competition rules or a fine of 5% per day of daily turnover. from Amazon for each day of non-compliance.
Important information on this subject