Amazon agrees to major competition franchises to avoid a $1 billion fine from the European Union

Image caption Amazon agrees to major competition franchises to avoid EU fine of $1 billion

picture: Maga Hatig (Getty Images)

After, after years of stumblingAmazon has agreed to implement a set of major business-to-business privileges for the European Commission to avoid paying a looming multibillion-dollar antitrust fine. Although Amazon will walk away from the skirmishes without having to drain its wallet, the franchises could fuel the flames of similar measures being pursued in parallel by other government regulators around the world.

This week’s deal ends two years of antitrust investigations that could have resulted in fines worth 10% of Amazon’s annual revenue. as part of PrivilegesAmazon promised not to take non-public data from sellers on its marketplace and use it to help with its retail business. In addition, the e-commerce giant will establish “non-discriminatory terms and standards” for marketplace sellers on its Prime service, as well as giving Prime sellers the freedom to choose any carrier for their logistics, rather than forcing them to use Amazon’s own logistics service.

Amazon will also take steps to address concerns about anti-competitive behavior in the Buy Box section (primarily the “Buy Now” and “Add to Cart” sections) of its retail site. The company has committed to treating all there sellers, including their own brands, equally when arranging showings. Perhaps most importantly, Amazon will give European customers a second buy box if there is another product from a different seller, “that differs sufficiently from the first product in terms of price and/or delivery.”

When taken as a whole, the European Commission believes these changes will help both European consumers and sellers who work with the platform. If Amazon reneges on those commitments, the commissioner says it can still impose a fine of up to 10% of Amazon’s annual gross sales. The concessions came just one day after the commission Accused Defining antitrust violation by using Facebook Marketplace to promote ads and distort external competition.

“Today’s decision sets new rules for how Amazon conducts business in Europe,” said EU Competition Commissioner Margrethe Vestager. “Amazon can no longer abuse its dual role and will have to change many business practices. Competing independent retailers and carriers as well as consumers will benefit from these changes that open up new opportunities and choices.”

While Amazon wasn’t completely sold on all of the panel’s findings, it seemed comfortable laying out the investigations behind them.

“We are pleased to have addressed the European Commission’s concerns and resolved these matters,” an Amazon spokesperson said in a statement. “While we continue to disagree with many of the European Commission’s initial conclusions, we have engaged constructively to ensure we continue to serve customers across Europe and support the 225,000 European SMEs selling through our stores.”

The penalty-free settlement decision likely comes as welcome news for Amazon, which still stands reeling From the shock of the $1.3 billion fine Italian regulators have imposed on it in the past general. In this case, the regulators alleged Amazon has provided special benefits to certain third-party merchants who have agreed to use Fulfillment by Amazon. As part of this anti-competitive partnership, the Italian regulators claimed, Amazon would give these select merchants access to Amazon Prime customers and certain selling events like Prime Day.

In the UK, Amazon is also facing a potential $1 billion class action Which accuses the company of using its Buy Box space to direct customers toward its own branded items as well. Similarly, that suit alleges that Amazon uses a “secret, self-preferring” algorithm to further prioritize its in-house brands.

Meanwhile, in the US, Amazon has so far managed to avoid the same major federal lawsuits filed recently against rival tech giants like Microsoft And the meta. Still, Bloomberg Transfer From earlier this year, the FTC alleged that the FTC was deepening its investigation into Amazon’s recent multibillion-dollar buyout spree. Amazon’s alleged self-preferring practices It is invoked regularly by US lawmakers who are still trying to pass meaningful antitrust legislation in Congress.

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