UK authorities conclude antitrust investigations into the retail platforms of Amazon and Meta

04 Nov, 2023

UK authorities conclude antitrust investigations into the retail platforms of Amazon and Meta

The United Kingdom's competition authority has successfully concluded its antitrust investigations into the retail platforms of tech giants Amazon and Meta, securing voluntary commitments that aim to ultimately benefit consumers.

The Competition and Markets Authority (CMA) announced on Friday that it had accepted these voluntary pledges to "protect fair competition" on Amazon Marketplace and Facebook Marketplace. Amazon Marketplace connects independent sellers with customers, while Facebook Marketplace allows users to advertise new and second-hand items for sale. These commitments are set to remain in place for the next five years.

In principle, fostering fair competition among businesses can lead to increased consumer choices. This, in turn, can potentially result in better product quality and lower prices, as per prevailing economic thought.

Ann Pope, the CMA's senior director for antitrust enforcement, expressed in a statement that Amazon's commitments will create a level playing field for thousands of UK sellers, enabling them to compete effectively with Amazon's own extensive retail arm. This, in turn, will provide consumers access to the "best deals." Amazon has committed to offering independent sellers a "fair chance" to feature prominently in its "Buy Box," a highly visible feature that allows customers to quickly purchase products or add them to their shopping carts.

Furthermore, Amazon has pledged to allow third-party sellers to negotiate their delivery costs directly with independent couriers for its Prime service.

As for Meta (formerly known as Facebook), it has committed not to exploit user data of those advertising on its retail platform. Meta's competitors will have the option to "opt out" of Meta using their data to enhance Facebook Marketplace. These commitments prevent Meta from leveraging advertising customers' data unfairly, thus ensuring fair competition.

Both Amazon and Meta welcomed the CMA's decision to close its investigations. The CMA, which initiated its probes into Amazon and Meta in 2022 and 2021, respectively, will appoint an independent party to oversee compliance with these commitments. It's essential to note that these pledges do not imply that the companies violated competition laws.

Recent years have witnessed increasing regulatory scrutiny of global tech giants, with concerns that their dominance can disadvantage smaller businesses. In a landmark case in September, the US Federal Trade Commission and 17 states sued Amazon, alleging that it unfairly promotes its own platform and services at the expense of third-party sellers.

In addition, data regulators in the European Union recently indicated that Meta might need to seek consent from its European users to use their data for targeted advertisements on Facebook and Instagram.