Prime suspect: Amazon to loosen logistics and delivery from EU retail

Bold move, Cotton. Let's see how that plays out for them

Amazon has avoided being charged with breaking EU law and a fine of up to $50 billion by making several commitments to the European Commission today, one of which was to allow Prime sellers to "freely choose any carrier" for their logistics and delivery services.

The Register reported that it would shortly make changes to its business practices late last week.

In a statement this morning, the EC confirmed the online souk's promises settle two antitrust investigations, and, if breached, could resulted in fines of $50 billion, or 10 percent of global revenues. The first was launched in November 2020, looking into the criteria used by Amazon when selecting which seller gets to lurk in the "Buy Box" on its website. The concern was that Amazon favored its own offers or those of sellers who use the retail juggernaut's logistic and fulfilment services. The EC concluded this could create a "possible bias" in granting to sellers access to its Buy Box and Prime programs.

The "Buy Box" – which allows buyers to easily add the product to their Amazon shopping cart – is critical for sellers as, according to the Commission at the time, it shows the offer of one single merchant for a given product and "generates the vast majority of all sales."

The "Buy Box" is also currently the subject of a lawsuit filed by California's Attorney General in the US in September. That suit alleges Amazon illegally stifles competition by punishing merchants for selling their products at cheaper prices on other online stores by removing the "Buy Box" from the item's page.

Under today's announcement, Bezos's company has committed to treating "all sellers equally when ranking the offers for the purposes of the selection of the Buy Box winner."

It will also undertake "not use any information obtained through Prime about the terms and performance of third-party carriers, for its own logistics services" and let Prime sellers pick "any carrier for their logistics and delivery services and negotiate terms directly with the carrier of their choice."

The second antitrust probe, begun in 2019 and with a Statement of Objections delivered in November 2020, had to do with how Amazon had been "systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third-party sellers."

The Commission found last year that that Amazon's reliance on marketplace sellers' "non-public business data to calibrate its retail decisions, distorted fair competition on its platform and prevented effective competition."

The EC said Amazon had proposed to commit "not to use non-public data relating to, or derived from, the independent sellers' activities on its marketplace, for its retail business" – and also wouldn't use it to sell branded goods or its own private label products.

The commitments will cover both Amazon's current and future marketplaces in the European Economic Area, the Commission confirmed.

We've asked Amazon for comment. ®