In a response to the Competition Markets Authority‘s (CMA) probe, Amazon has offered to stop using third-party seller data in a bid to level the playing field in its Marketplace.

Around 280,000 independent sellers used Amazon’s Marketplace in 2019 to connect with customers. The company’s net UK sales in 2022 amounted to $30 billion (~£23.bn).

The CMA began investigation Amazon’s Marketplace practices in July 2022 after concerns it has breached the Competition Act of 1998 by abusing its dominant position to affect trade in the UK.

The company came under similar fire in the European Union in 2019 for its practices concerning its use of third-party seller data to give it a potentially ‘unfair’ advantage, breaching anti-trust laws.

Amazon has released its proposed commitments to start treating third-party sellers differently in response to the concerns raised by the competition regulatory body.

Amazon’s commitments include forgoing the use of non-public data provided by third-party sellers to Amazon or derived through their use of Amazon’s marketplace or related services for the purposes of its own retail operations that are in competition with third-party sellers.

This follows the CMA’s concerns that Amazon’s access to commercially sensitive data relating to third-party sellers helped its retail business to decide which products to sell, manage stock levels for those products, set prices, and make other important commercial decisions.

Further, Amazon says it will apply objectively verifiable, non-discriminatory conditions and criteria to determine which offer (either from Amazon Retail or third-party sellers) will become the ‘Featured Offer’; and to not use ‘Prime’ eligibility or ‘Prime’-labelling as relevant criteria for selecting the Featured Offer.

Prime eligibility and Prime labelling refers to Amazon’s membership offers, where users can buy a subscription to Amazon in turn for offers of free delivery and discounted prices.

The CMA was concerned that products being offered in the featured ‘Buy Box’ were less likely to come from third-party sellers than similar offers from either Amazon’s own retail business or third-party sellers that use Amazon’s delivery services.

In addition, Amazon says it will allow third-party businesses using Marketplace to negotiate their own rates directly with independent providers of Prime delivery services so that customers can benefit from lower delivery costs where better rates are negotiated.

Finally, Amazon would be required to appoint an independent trustee who will monitor the company’s compliance with these commitments. The CMA will even have a direct say in this appointment, ensuring they have the necessary skills and expertise for the job.

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Ann Pope, Senior Director for Enforcement at the CMA, said: “Amazon’s commitments to the CMA will help ensure that third-party sellers on Amazon Marketplace can compete on a level-playing field against Amazon’s own retail business and, ultimately, mean that customers in the UK get a better deal.

“The CMA took this action after it heard concerns that Amazon was using its strength in the market to gain an advantage over thousands of businesses which use Amazon Marketplace to reach customers.

“We are now consulting on these commitments which we believe, at this stage, will address our concerns.”

Amazon’s CMA woes may not end here, however. The company, as well as Microsoft, are currently facing an anti-trust probe into their cloud market dominance. Both companies have a combined 60-70% share of the total UK cloud market, and some of their practices are being investigated as monopolistic and anti-competition.