Amazon avoids a multibillion-dollar fine as it reaches an antitrust settlement in the European Union

The regulator was interested in Amazon’s dual role as a marketplace and competitor to merchants selling on its platform.

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Amazon On Tuesday, it agreed to make some significant changes to its business in Europe as part of settling antitrust investigations that could have resulted in a hefty fine for the e-commerce giant.

The European Commission, the European Union’s executive arm, announced on Tuesday that Amazon had made a series of commitments to address allegations that the company was using independent sellers’ data to its advantage.

The regulator has expressed concerns about Amazon’s dual role as a marketplace and competitor to merchants selling on its platform. Amazon, for its part, says it is an enabler for small businesses in the region.

In November 2020, the commission issued Amazon a Statement of Objections to its “systematic” use of non-public business data from independent sellers for the benefit of its retail business.

It also opened a second investigation into allegations that the criteria set by Amazon for selecting merchants featured in the Buy Box tool and enabling sellers to offer products to users of its Prime membership program gave preferential treatment to Amazon retail businesses or sellers using its delivery services.

On Tuesday, the commission said Amazon had given assurances that it would change some of these practices. One of the commitments was to stop using non-public data about independent sellers for retail business or to sell branded goods and private label products.

The company has also agreed to offer a second buy-in box when there is a second offer that differs from the first on price or delivery, and to allow Prime sellers to choose any carrier for their logistics or delivery services.

The changes only apply to the European Economic Area. In Italy, Amazon has agreed separate legal remedies with the country’s competition regulator regarding the Buy and Prime fund. Amazon will have until June 2023 to implement the changes, which will remain in effect for five to seven years.

“Today’s decision sets out the rules that Amazon will need to follow in the future rather than Amazon having those rules defined for all players on its platform,” EU competition chief Margrethe Vestager said in a speech on Tuesday.

“With these new rules, European retailers, carriers and independent competing customers will have more opportunities and choices.”

If the company is found guilty, it could face a fine of up to 10% of its global annual revenue. For Amazon, a company that generated $469.81 billion in revenue in 2021, that would have meant a record $47 billion fine.

However, the EU may still fine Amazon 10% of its annual turnover if it breaches the obligations, or a periodic fine of 5% per day of its daily turnover for each day of non-compliance.

In a statement, Amazon said it was “delighted to have addressed the European Commission’s concerns and resolved these issues.”

“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 that sell through our stores,” an Amazon spokesperson told CNBC via mail. mail.

The development represents a subtle victory for the European Union, which is seeking to effect seismic changes in the business models of US tech giants with its Digital Markets Act. The legislation, which took effect last month, aims to prevent so-called “custodial” firms from abusing their market position to harm smaller competitors.

It’s already causing big changes for some of these companies. an Applefor example, is said to be working on changes that would allow users to “download” apps from the web, bypassing the App Store, to make its business DMA-compliant.

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