Competition regulators probe Amazon's Marketplace and Microsoft's buy of Activision Blizzard
Tech giants under scrutiny by the Competition and Markets Authority
The UK's Competition and Markets Authority (CMA) is kicking off investigations into both Microsoft's merger with Activision Blizzard and concerns about Amazon's Marketplace habits.
The second probe is centred on how Amazon sets criteria for offers in the "Buy Box" on its page and which sellers can list products with Amazon's "Prime label" on the company's marketplace. The worry is that anticompetitive practices might be at work, resulting in a worse deal for customers.
The European Commission is already investigating Jeff Bezos's e-commerce business, and the UK is following suit (having left the EU, but facing similar questions.) At issue is if Amazon is giving its own retail business and sellers using its services (for example storage, packaging and delivery) priority over other third-party sellers who choose not to do so.
The three areas under investigation are
- how Amazon collects and uses third-party seller data (and if this feeds unfairly into business decisions made by the company's retail tentacle),
- the criteria Amazon uses for making suppliers the first or preferred choice in the 'Buy Box' from where customers can either Buy Now or Add to Basket
- how Amazon sets the eligibility criteria for selling under the Prime label.
Noting that millions of UK customers use Amazon's services, general counsel at the CMA (and soon to be interim chief executive) Sarah Cardell said: "Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market. Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items or having less choice."
The Register asked Amazon for its take. A spokesperson said: "We will work closely with the CMA during their investigation, although we believe we've always worked hard to help small businesses selling on Amazon to succeed, which is in both their and our best interests. We remain proud of the continued support we provide to businesses of all sizes across the UK."
The CMA has been busy of late. It also has an open investigation into Google and Amazon under consumer protections laws over what the tech giants are doing to fight off fake reviews and today announced it would be taking a look at the acquisition of Activision Blizzard by Microsoft.
- Amazon not happy with antitrust law targeting Amazon
- I've got way too much cash, thinks Jeff Bezos. Hmmm, pay more tax? Pay staff more? Nah, let's just go into space
- Microsoft pledges neutrality on unions for Activision staff
- Uncle Sam probes Activision for any insider trading
Activision Blizzard has an eyewatering value of $68.7 billion, although accusations of a toxic workplace culture have bedevilled the business in recent years. The CMA is currently inviting views on the purchase by Microsoft (for example, will it result in higher prices and lower quality?) with a submission deadline of July 26, 2022. A decision on whether the deal merits an in-depth assessment is expected by September 1, 2022.
Lisa Tanzi, corporate vice president and general counsel for Microsoft said: "We will fully cooperate with the CMA's merger review. We expect and think it's appropriate for regulators to take a close look at this acquisition.
"We have been clear about how we plan to run our gaming business and why we believe the deal will benefit gamers, developers, and the industry. We're committed to answering questions from regulators and ultimately believe a thorough review will help the deal close with broad confidence, and that it will be positive for competition. We remain confident the deal will close in fiscal year 2023 as initially anticipated."
Rocio Concha, Which? director of Policy and Advocacy, commented: "This is the latest in a growing number of investigations into concerns that tech giants may be limiting competition and harming consumers. While welcome, these cases can be slow and UK consumers would be better served by the government giving powers to the Digital Markets Unit so it can introduce and enforce a pro-competition regime for digital markets." ®
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