Amazon Marketplace Commitments
The Competition and Markets Authority (CMA) has taken significant steps to ensure fair competition on Amazon Marketplace. In response to separate investigations into Amazon and Meta, the CMA has accepted a set of commitments that aim to level the playing field for third-party sellers and safeguard the interests of UK consumers.
Empowering Third-Party Sellers
A critical aspect of the commitments secured from Amazon is to provide a fair chance for third-party Marketplace sellers to compete effectively. Most sales on Amazon, including saucepans and cosmetics, occur through the highly coveted ‘Buy Box.’ These commitments aim to ensure that independent sellers have a fair opportunity to feature their offers in the ‘Buy Box,’ preventing customers from missing attractive product offers.
Data Fairness and Delivery Rates
Amazon will also be prohibited from using Marketplace data acquired from third-party sellers to gain an unfair competitive advantage. This ensures that the e-commerce giant does not exploit the valuable data of independent sellers for its benefit. Furthermore, sellers will have the freedom to negotiate their own delivery rates directly with independent providers of Prime delivery services.
To ensure the compliance of these commitments, an independent trustee approved by the CMA will closely monitor Amazon’s actions, thus ensuring a fair and competitive environment for all stakeholders.
The CMA initiated an investigation in July 2022, raising concerns about Amazon’s dominant position in the UK’s online retail market. The investigation focused on allegations that Amazon favored its own retail business over competitors within Amazon Marketplace and those using its warehousing and delivery services instead of rival logistics companies. In July 2023, the CMA initiated a consultation to review the commitments offered by Amazon during the investigation.
Facebook Marketplace Commitments
Meta, the parent company of Facebook, has also committed to ensuring fair competition and data protection on its Facebook Marketplace platform.
Data Protection for Advertising Customers
Meta’s commitments prevent the company from exploiting its advertising customers’ data, ensuring the protection of businesses and consumers. These measures are aimed at preventing Meta from gaining an unfair competitive advantage that could distort competition in the marketplace.
Enhanced Autonomy for Competitors
In a significant move, Meta has allowed competitors of Facebook Marketplace who advertise on Meta platforms to ‘opt-out’ of their data being used to improve Facebook Marketplace. This empowers competitors with greater autonomy over their advertising data and prevents any undue advantages.
Limits on Ad Data Usage
Meta has also pledged to limit its use of advertising data when developing its products. This commitment ensures that Meta cannot exploit advertising customers’ data to gain an unfair advantage when competing with products or services sold by those very advertising customers.
The Competition and Markets Authority’s successful negotiations with Amazon and Meta mark a significant milestone in the effort to ensure fair competition and data protection in the tech industry, safeguarding the interests of both businesses and consumers. These commitments serve as a testament to the CMA’s dedication to maintaining a level playing field in the evolving landscape of online retail and advertising.