📦 Amazon Goes on the Defensive
Just as we told you Google did last week, Amazon is now trying to settle a case with third-party vendors on its site in what appears to be an attempt to diffuse bigger antitrust cases down the road. According to The Verge, the EU opened an antitrust investigation into the e-commerce titan back in 2019 for “abusing its dual-position as both marketplace operator and retailer; using the sales data it collects from smaller vendors to outmaneuver them.” Now, Amazon is offering concessions both to the EU and third-party sellers that includes “refraining” from using non-public data from these independent sellers and adding a second “Buy Box” to product listings.
The EU has stated that Amazon's buy box feature “unduly favor[s] Amazon’s own retail business, as well as marketplace sellers that use Amazon’s logistics and delivery services,” notes TechCrunch, adding that the feature “may harm other marketplace sellers, their independent carriers, other marketplaces, as well as consumers that may not get to view the best deals.”
As The Verge explained, the second buy box will “apply equal treatment to all sellers when ranking their offers for the purposes of the selection of the winner of the Buy Box” rather than preferring the Amazon version of the product, and will add a second Buy Box for products that are “sufficiently differentiated from the first one on price and/or delivery.”
If these concessions are accepted, they will take effect throughout the EU (except in Italy) and will last for 5 years, helping the online retailer avoid billions in fines. So why not in Italy? Well, the country is pursuing its own case against Amazon around these same issues.
The EU recently passed the Digital Markets Act (or DMA for short) — which is due to go into effect in 2024 — and will require Amazon (and other Big Tech firms) to change their data behaviors, including the changes it is implementing now. However, Amazon has expressed concerns over the DMA, stating that it is “unfairly targeting Amazon and a few other U.S. companies,” but that “we have engaged constructively with the Commission to address their concerns and preserve our ability to serve European customers and the more than 185,000 European small and medium-sized businesses selling through our stores.”
The optics are great here for Amazon: start preparing for future EU regulations today, then claim you're making concessions for independent sellers, all while (potentially) avoiding hefty fines. It's yet to be seen what other data tricks Amazon has up its sleeve to maximize profits.