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Will Amazon’s antitrust battles get worse before they get better?

December 23, 2022Written by Tom Ryan

Photo: Getty Images/josefkubes

Amazon has made several commitments related to business practices in Europe as part of settlement over alleged unfair treatment of third-party sellers. The commitments cover:

Data use: Refraining from using nonpublic data from third-party marketplace sellers to compete with them, including developing private labels.
Buy Box: Treating all sellers equally when ranking which item gets featured in the Buy Box (the winning default “Buy Now’’ or “Add to Cart” item in a product search). A competing offer will now be displayed in addition to the main Buy Box item “if there is a second offer from a different seller that is sufficiently differentiated from the first one on price and/or delivery.”
Prime: Setting “non-discriminatory conditions and criteria” for marketplace sellers to qualify for Prime offers. Third-party sellers utilizing Prime will not be forced to use Amazon’s logistics.

European Union competition commissioner Margrethe Vestager said in a statement, “Amazon can no longer abuse its dual role and will have to change several business practices. Competing independent retailers and carriers as well as consumers will benefit from these changes opening up new opportunities and choices.” Amazon has until next summer to implement the changes, which will remain in place for five to seven years. Amazon avoided a fine that could have totaled up to 10 percent of global revenues. Amazon insists it is a small-business enabler, with up to 60 percent of sales on its platform coming from third-party sellers. Amazon said in a statement attained by CNBC, “While we continue to disagree with several of the preliminary conclusions the European Commission made, we have engaged constructively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium sized businesses selling through our stores.” Google, Meta, Apple and Microsoft are also facing antitrust litigation, but the settlement marks the first time Amazon’s overhauled practices as the result of a government investigation and may drive changes elsewhere. A source familiar with Amazon's intentions told Recode, “It appears Amazon’s strategy all along was to make it seem like it was giving things up that it was perfectly comfortable to give up.”

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