Amazon under investigation for promoting ‘worse deal’ to customers



Amazon is being investigated by the competition watchdog over fears shoppers could get a raw deal because it is prioritizing the promotion of its own products.

The Competition and Markets Authority (CMA) has raised the alarm on potentially anti-competitive practices being used by the US behemoth which could result in a “worse deal” for customers.

It said it will focus on how the brand sets the eligibility criteria for selling under its Prime label, which comes with benefits such as free delivery, as well as how it chooses which items are prominently displayed with options to “buy now”.

It will also investigate how the retail giant collects and uses third-party seller data, including whether this gives Amazon an unfair advantage in relation to business decisions.

The overall aim is to work out whether Amazon has a “dominant position in the UK and whether it is abusing that position and distorting competition by giving an unfair advantage to its own retail business or sellers,” the CMA said.

Sarah Cardell, general counsel at the CMA, said it was important to investigate whether the brand was giving its own business an unfair boost given that “millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button”.

The move comes as Brussels closes in on a deal with the online retail giant amid EU competition concerns.

According to the Financial Times, Amazon plans to share more data with rivals and offer buyers a wider choice of products as part of the agreement which is expected to be formally agreed after the summer.

Amazon is not the only tech giant being watched closely by the watchdog, which also revealed on Wednesday that it was looking into Microsoft’s $69bn (£58bn) Activision takeover of Call of Duty maker Activision Blizzard.

Amazon said the company was working with the CMA on its investigation, adding that more than 50pc of the products it sells are from small businesses.

“There are now more than 65,000 small and medium-sized businesses in the UK that sell on Amazon, supporting more than 175,000 jobs across the country,” a spokesman said.

UK regulators have been cracking down on Big Tech in recent years. The latest CMA investigations come a year after the watchdog opened a probe into Amazon and Google’s alleged failure to prevent an influence of fake reviews that make goods advertised on their websites appear artificially popular.

Britain last year unveiled plans for a new Digital Markets Unit inside the watchdog to block Silicon Valley giants from crowding out competition and stifling innovation.

The unit was set up so the watchdog could more easily intervene in takeovers by large tech firms with “strategic market status,” although experts warned the start-up scene would be badly damaged by the proposals that would all but ban big tech firms from making deals.

However Rocio Concha, director of policy and advocacy at Which?, said it was vital to equip the unit with powers that protect consumers.

She said: “This [Amazon probe] is the latest in a growing number of investigations into concerns that tech giants may be limiting competition and harming consumers.

“While welcome, these cases can be slow and UK consumers would be better served by the Government giving powers to the Digital Markets Unit so it can introduce and enforce a pro-competition regime for digital markets.”


www.telegraph.co.uk

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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