Amazon, EU reach deal to end antitrust investigations
A win for big tech regulation and the Digital Markets Act
Amazon has reached a deal with the European Commission to escape a fine for allegedly misusing seller data, according to the Financial Times.
As part of the agreement, Amazon have to will treat rival products equally to its own in the Buy Box section of its website, enhancing third-party sellers' visibility.
Most purchases on Amazon are made via the Buy Box.
The company has also pledged to provide new featured offers for consumers who are less worried about delivery speed, and will allow merchants using its Prime membership programme to pick any shipping provider and directly negotiate rates, instead of forcing them to use Amazon's logistics services.
Amazon got in trouble with Italian regulators about these practices last year, eating a €1.3 billion fine as a result.
According to the FT, the deal could be announced on 20th December, although the date may change.
'There's very little to discuss,' a source told the publication.
Amazon will be obligated to honour its commitments for at least five years once the deal is formalised.
The new deal would represent a huge win for the European Union, serving as an example of how large tech firms would be required to adhere to the new Digital Markets Act (DMA).
The DMA is a comprehensive set of rules designed to reduce the market dominance of companies with a solid hold on the internet economy, known as 'gatekeepers'. The primary objective of the reforms is to stop tech giants from abusing their dominance and hurting smaller competitors.
When Amazon pledged in July to take steps to make its seller programme fairer, the company said it felt 'unfairly' targeted by regulations like the DMA. However, it also said it was 'engaging constructively' with authorities to resolve concerns over its business.
The deal with the EU means Amazon will avoid formal charges of breaching EU law and a hefty financial penalty.
Companies violating DMA rules could face serious repercussions. They run the risk of being fined up to 10% of their total worldwide sales; and if they break the law again, the maximum possible penalty climbs to 20%.
Amazon's assistant general counsel, Chris Meyers, said at a conference on Monday that Amazon's commitments were consistent with how the company intended to follow Brussels' new regulations.
'The specific commitment that we have proposed, and which we think also meets the obligations of the DMA, is really the approach we are going to take under the DMA,' he said.
This alleged deal comes three years after investigators in Brussels began an unrelated investigation into whether or not Amazon uses data to engage in anti-competitive practices.
At that time, European Commission said: 'When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on the Commission's preliminary fact-finding, Amazon appears to use competitively sensitive information - about marketplace sellers, their products and transactions on the marketplace.'
The probe, which started in 2019, focused on the typical agreements that Amazon requires of its marketplace sellers. According to the Commission, these agreements provided the company power to analyse and use that data for its own advantage.