Amazon probed over how it treats small businesses

The CMA will investigate how Amazon manages third-party data and whether it gives small businesses who use its Fulfilment by Amazon service an unfair advantage

The Competition and Markets Authority (CMA) is investigating whether Amazon investigates its market position when it comes to third-party sellers who use its website.

The competition watchdog is to determine whether the tech giant holds a dominant position in the market and if it is giving an unfair advantage to both its own retail arm and to third parties who pay extra for its Fulfilment by Amazon (FBA) paid-for addon.

FBA handles some aspects of the logistics process on behalf of small business owners, including storage, packaging and delivery.

>See also: Amazon to raise fees for marketplace sellers

Amazon Marketplace is a platform for Amazon and third-party sellers to promote and sell products – in which the ecommerce giant receives a share of sales. Sellers can pay additionally for the fulfilment of their goods, which includes storage, packaging and delivery.

There are three areas the CMA will investigate:

  • How it collects and uses data from its sellers
  • Which criteria it sets for which products are listed top on the website
  • How sellers are listed under the Prime label, its loyalty programme which offers free next-day delivery for members

If Amazon is using third-party data to benefit its retail arm and those paying extra for its logistics solution, that could hamper competition and make things worse for consumers – which is the north star of the CMA.

>See also: Average small business makes £300,000 on Amazon

EU antitrust investigation

Meanwhile, the ecommerce giant has agreed to share more data with competitors and offer customers a wider choice of products, following similar concerns for the EU market from EU antitrust regulators. As part of the deal, third-party sellers on its marketplace platform will also have more access to information that could help them sell more online.

Sarah Cardell, general counsel at the CMA, said: “This is an important area so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services – both of which could weaken competition.

“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items or having less choice.”

More on Amazon Marketplace

Third party platforms: is it worth selling through the likes of eBay and Amazon?

Dom Walbanke

Dom Walbanke

Dom Walbanke is a feature writer for Growth Business and Small Business, focused on matters concerning start-ups and scale-ups. He has also been published in the Independent, FourFourTwo magazine and various...

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