Amazon Offers to Share Data to Sellers to Avoid Antitrust Fines

It seems Amazon’s plan to avoid potentially paying antitrust fees imposed by EU regulators is to give its competition a boost by sharing marketplace data with third-party marketplace sellers.

An Ongoing Investigation

Back in 2020, the European Commission charged Amazon with antitrust violations for using its size, power, and data to promote its own products and gain an unfair advantage over third-party Amazon sellers. According to the ongoing probe, Amazon is dominates its own marketplace by using data to know what’s selling well and which products to develop.

The ecommerce giant is looking at a potential fine reported to be as much as 10% of its global revenue.

As reported by Reuters, in an effort to dissuade EU regulators from imposing such a fine, Amazon is offering to:

• share marketplace data with third-party sellers; and
• stop using such data to give itself a leg up on independent private label sellers

The European Commission, headed by Chief Margrethe Vestager, could accept Amazon’s settlement offer and drop the case by August, Politico says . This means that the reportedly “most advanced Big Tech antitrust probe” ends without a fine or a protracted legal battle. The measures, which become legally binding upon approval, are also pursuant to the Digital Markets Act (DMA), a recent EU regulation that enables more competition and prevents large companies from abusing their market dominance.

A Second Buy Box?

In the report, sources have also said that Amazon is planning to add a second buy box for rival products (those sold by independent sellers) in case an Amazon product appears in the first buy box.

Nearly 90 percent of shoppers buy through the Buy Box, which makes it a must-have for private-label sellers, especially those operating within highly competitive niches. It’s not uncommon for Amazon’s products sold through its own private label brands to have the Buy Box and prejudice competing products sold by third-party sellers.

Whether or not a secondary Buy Box effectively removes the built-in advantage that Amazon has given its own brands remains to be seen, but it’s definitely more welcome visibility for Amazon sellers trying to compete in the marketplace.

Prior Infractions

For a number of reasons, being able to access marketplace information previously only available to Amazon is a win for sellers, what with the company's rather unsavory record of anticompetitive behavior:

• Earlier this year, independent reports revealed that Amazon offsets its losses and maintains its alleged monopoly by passing the burden to third-party Amazon sellers through the fees for using its inventory and fulfillment services.
• In the US, the SEC had launched an investigation on Amazon on how it uses data to copy and develop high-selling products on the platform to the detriment of its third-party sellers.
• Across the Atlantic just last year, Italian antitrust regulators levied a $1.3 billion fine on Amazon for abusing its dominance by effectively forcing sellers to opt into FBA fulfillment services to stay profitable.
• Amazon’s “Sold by Amazon” program was also recently shut down for being an unlawful price-fixing scheme.

Growing Pressure

Big Tech companies (Amazon, Apple, Google, etc.) could only face more antitrust pressure moving forward, as regulations like the EU’s DMA could affect these giants beginning early 2024.

Amazon’s compliance with regulations across the Atlantic could potentially be adopted for the US marketplace and benefit the over one million active sellers on the platform.