Amazon Being Investigated For Allegedly Severe Violation
Amazon has found itself knee-deep in a legal battle with the UK's government due to an alleged severe violation.
This article is more than 2 years old
Amazon is one of the largest retailers in the world. Its e-commerce enterprise is unbeatable, with products from thousands of third-party sellers worldwide for every basic human need. But, the UK government has been increasingly suspicious of the tech company’s business practices. UK’s antitrust authority, responsible for equitable competition in marketing, is looking into Amazon’s practices that potentially harm smaller sellers.
Known as the Competition and Markets Authority, this government group wants to investigate Amazon based on its alleged malpractice with its third-party businesses. The tech company may be hurting competition on its UK platform as well as providing worse deals for its valued customers. The Competition and Markets Authority stated that Amazon might be “anti-competitive” in the British marketplace, leading to damaging effects for the third-party businesses using Amazon to sell their products.
Anyone who has been on Amazon will notice tons of products specifically manufactured by the company itself. But, one of the benefits of going to a site like Amazon’s is its amalgamation of worldwide third-party sellers. The tech company’s site is like an online one-stop-shop convenience store, perfect for finding anything a person desires. Though Amazon provides a space for third-party sellers to gain customers, the company may utilize these merchants’ data for its own means.
The British Competition and Markets Authority plans to investigate three main categories to determine if Amazon abides by UK law. The government agency will first look into how the tech company records and uses external merchants’ data. The agency wants to know if Amazon utilizes this information for their own personal goods and if data gives the company an unfair marketing advantage. The second area to investigate is the “Buy Box” function, which pops up for some third-party sellers’ goods so a consumer can check out immediately. The UK agency wants to determine what sets a precedent for this expedited function and what criteria third-party sellers need to enable the “Buy Box” addition.
The final area the Competition and Markets Authority wants to understand better is Prime shipping, which is Amazon’s most celebrated function. A Prime subscription can allow customers to get shipping on the same day or the day after something is ordered, an expedited process that never occurred before Amazon. This attracted many consumers to subscribe to Prime while other e-commerce competitors struggled to keep up. The UK government agency is suspicious about when Prime shipping is applied and what third-party sellers receive the Prime ability to have their items delivered quicker. If certain small businesses on the site aren’t granted expedited shipping, customers could look to other products instead, including Amazon-made products.
Though the CMA hasn’t made any conclusions yet about Amazon’s business practices, the agency suspects foul play. The tech company has obfuscated its third-party seller practices, leading to the CMA investigation. Amazon recently stated that it would comply with the UK government agency to make the process painless and quick. A spokesperson said that while they’re ready to corporate, they always “help small businesses” on the e-commerce site.
