Amazon and Meta agree to retail competition improvements, watchdog says

3 November 2023, 15:04

Amazon fulfillment centre
Amazon fulfillment centre. Picture: PA

The CMA says the two tech giants have agreed to improvements to their practices after separate investigations.

The UK’s competition watchdog says it has secured new commitments from Amazon and Meta around competitive practices on their retail marketplaces to protect consumers.

The Competition and Markets Authority (CMA) said it had secured the new arrangements after separate investigations into the two platforms.

As part of the new commitments, Amazon has agreed to give independent sellers a fair chance of their offers being featured in the site’s “Buy Box”, where most sales on the platform take place.

In addition, the CMA said Amazon will be prevented from using marketplace data it obtains from third-party sellers to give itself an unfair competitive advantage.

It will also allow sellers to negotiate their own delivery rates directly with independent providers.

The CMA launched an investigation in July 2022 into concerns that Amazon was abusing its position as the UK’s leading online retail platform.

This included concerns that Amazon was giving an unfair advantage to its own retail business over independent sellers that use its market places, and to sellers who use Amazon’s own warehouse and delivery services over rival logistics firms.

In relation to Meta, the CMA said the tech giant had signed commitments which will prevent it from exploiting advertising customers’ data via its Facebook Marketplace.

Going forward, competitors of Facebook Marketplace that advertise on Meta platforms will have the ability to opt out of their data being used to improve the Facebook retail platform.

Meta has also pledged to limit how it uses ad data when developing its products, the CMA said.

“We welcome the constructive resolution of our concerns in a way that benefits people and businesses and expect to see more of this kind of resolution once the Digital Markets, Competition and Consumers Bill comes into force,” CMA chief executive Sarah Cardell said.

Ann Pope, the competition watchdog’s senior director for antitrust enforcement, said: “We have accepted Amazon’s commitments as they help thousands of independent UK sellers to compete on a level playing field against Amazon’s own retail arm. This should also mean customers get access to the best product offers.

“The commitments secured from Meta mean the firm cannot exploit advertising customers’ data to give itself an unfair advantage – and as such distort competition.

“Having assessed the commitments and the feedback received, including from sellers, advertisers and customers, we believe both sets of commitments address the specific competition concerns we had here in the UK.”

Facebook Marketplace
Meta said it welcomed the CMA’s decision to close its investigation into Facebook Marketplace (Dominic Lipinski/PA)

An Amazon spokesperson said: “We have engaged constructively with the CMA and we welcome this resolution which will preserve our ability to serve both our customers and the over 100,000 small and medium-sized businesses selling through our UK store.

“We are extremely proud of the work our teams have done to support our sellers’ success over the past two decades.”

A Meta company spokesperson said: “We welcome the CMA’s decision to close its investigation into Marketplace on the basis of the commitments offered by Meta to put in place systems and controls designed to confirm and validate that advertiser data from competitors is not used in Marketplace.

“We also welcome the CMA’s confirmation that it found no concerns with respect to the use of advertising data in Facebook Dating.”

By Press Association

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