Amazon is under investigation by the UK Market Authority

July 11, 2022 by
Frank Calviño

Recently, the UK Competition and Markets Authority (CMA) started an investigation into Amazon, due to its dominant position in the local market. This is under the assumption that the company could be generating distortion in the competition. 

In this regard, the CMA's general counsel, Sarah Cardell, has argued that "any loss of competition is a loss for consumers". 

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Amazon's position in the UK

According to the CMA, thousands of UK businesses currently use Amazon to sell their products. Therefore, the CMA believes it is vital that they are able to operate in a competitive market. They argue that if competition is lost, consumers may find themselves paying more money for products or having access to lower-quality products due to a lack of choice. Thus, distortions in competition can have a negative impact on both businesses and consumers.

This CMA investigation is not the first to be conducted on Amazon. In December 2021, the company was fined by the Italian market authority AGCM for considering that Amazon abused its dominant position in the Italian market. In addition, the European Commission is currently conducting similar studies. However, these do not cover the problems that may exist in the UK, post-Brexit. 

The CMA's investigation into Amazon

In view of the above, the CMA has taken the decision to start its own investigation. In particular, it is looking into whether Amazon offers an unfair advantage to its own business and to sellers using services such as Fulfillment by Amazon. To this end, it will analyze how Amazon collects and uses the data of third-party sellers. The criteria used for the allocation of the company's Buy Box and for sales under the Prime label will also be analyzed. 

From this measure, the market authority will seek to find out whether Amazon obtains, through its practices, an unfair advantage in terms of users' commercial decisions. 

Other investigations by the European Commission and the CMA

But the current case against Amazon is not the only one of its kind. In addition, the European Commission is investigating the e-commerce giant in similar areas in parallel. The CMA has therefore announced that it will maintain direct and permanent contact with the European Commission in order to keep abreast of progress in this investigation. 

At the same time, the CMA has another investigation open on both Amazon and Google. This relates to concerns that these companies are not developing sufficient measures and strategies to combat fake reviews in relation to business and the unfair influence they may have on consumers' purchasing decisions.

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