February 7, 2023

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Amazon strikes deal with EU to end long-running data reviews

Amazon has reached an agreement with EU antitrust authorities to address concerns that its use of non-public data undermines competitors and announced new measures to level the playing field for sellers in its marketplace.

The deal, announced on Tuesday, will see the US tech giant treat all sellers equally and make competing products more visible in Amazon’s “buy box,” which generates the majority of purchases on the site.

Amazon will also create a second Buy Box that will display alternative offers for consumers who decide delivery speed is less important to them.

The deal ends two long-running investigations into the $866 billion company and represents a victory for the EU as it will serve as a blueprint for compliance with the new Digital Markets Act, a landmark law aimed at empowering Big contain tech.

“Amazon can no longer abuse its dual role and will have to change some business practices,” said EU competition chief Margrethe Vestager. “Competing independent retailers and carriers, as well as consumers, will benefit from these changes, which open up new opportunities and choices.”

The agreement will change many of Amazon’s longstanding business practices. Sellers using the Amazon Prime membership program can also choose any logistics company and negotiate their contracts directly, rather than being tied to using Amazon’s logistics services.

These commitments are legally binding, will remain in place for five to seven years and have been agreed with EU officials after nearly three years of investigation.

By enacting these measures, Amazon has avoided formal charges of breaching EU law and a potential fine of up to 10 percent of global sales.

Should Amazon breach the commitments, the Commission could enforce this fine without having to find an antitrust violation. Alternatively, regulators could impose a periodic fine of 5 percent of Amazon’s daily sales for each day of non-compliance.

“We are pleased that we have addressed the concerns of the European Commission and resolved these matters,” Amazon said.

The company added that it disagreed with several of the European Commission’s preliminary conclusions and had worked constructively to ensure it could continue to serve customers across Europe.

After the Digital Markets Act, which came into force in November, legislation obliges large platforms to treat data equally. It prohibits self-preference, such as when a company could prioritize its products over competitors in its online marketplace when it comes to searches.

Facebook owner Meta was faced with a complaint by the EU’s antitrust authority on Monday over concerns that the social network’s classifieds service was unfair to competitors.

By automatically giving its users access to Facebook Marketplace, the network’s platform for buying and selling goods, the social network has “a significant sales advantage that competitors cannot match,” the European Commission said.

Meta said the claims were unfounded and would be working with authorities to dispute them.