CMA secures improvements in ways Amazon and Meta treat competitors, benefitting customers
The CMA has secured commitments from 2 of the largest digital players, Amazon and Meta, in 2 separate cases, benefitting sellers and customers by ensuring fair competition on their retail platforms.
The Competition and Markets Authority (CMA) has today accepted sets of commitments from 2 major tech corporations - Amazon and Meta - as a result of separate investigations. These will help protect fair competition on each of their retail platforms – Amazon Marketplace and Facebook Marketplace.
Amazon Marketplace
Commitments secured by the CMA from Amazon will help ensure that third-party Marketplace sellers can compete on a level-playing field and that UK customers get access to the best deals.
Most sales on Amazon – everything from saucepans to cosmetics – take place through the ‘Buy Box’. By giving independent sellers that use the Marketplace a fair chance of their offers being featured in the ‘Buy Box’, the commitments will help ensure that customers do not miss out on attractive product offers.
In addition, Amazon will be prevented from using Marketplace data it obtains from third-party sellers to give itself an unfair competitive advantage and will allow sellers to negotiate their own delivery rates directly with independent providers of Prime delivery services. Compliance with these commitments will be monitored by an independent trustee that will be approved by the CMA.
The CMA launched an investigation in July 2022 into concerns that Amazon was abusing its position as the UK’s leading online retail platform. This included concerns that Amazon was giving an unfair advantage to its own retail business over competing sellers that use Amazon Marketplace, and to sellers that use Amazon’s own warehousing and delivery services rather than rival logistics businesses. In July 2023, the CMA launched a consultation on the commitments offered by Amazon during its investigation.
More information can be found on the CMA’s Amazon Marketplace case page.
Facebook Marketplace
Meta has also signed commitments, which will prevent the firm from exploiting its advertising customers’ data, meaning businesses, and ultimately consumers, are protected. Without these measures in place, Meta risks having an unfair competitive advantage that could distort competition.
Going forward, competitors of Facebook Marketplace that advertise on Meta platforms can ‘opt out’ of their data being used to improve Facebook Marketplace.
As well as giving competitors more autonomy over their ad data, Meta has also pledged to limit how it uses ad data when developing its products. As a result, Meta cannot exploit advertising customers’ data to give itself an unfair advantage when competing with products or services sold by those advertising customers.
For more information, see the CMA’s news story: CMA protects competition by curbing Meta’s use of ad customers’ data.
Sarah Cardell, Chief Executive of the CMA, said:
We welcome the constructive resolution of our concerns in a way that benefits people and businesses and expect to see more of this kind of resolution once the Digital Markets, Competition and Consumers Bill comes into force.
Ann Pope, Senior Director for Antitrust Enforcement at the CMA, said:
We have accepted Amazon’s commitments as they help thousands of independent UK sellers to compete on a level playing field against Amazon’s own retail arm. This should also mean customers get access to the best product offers.
The commitments secured from Meta mean the firm cannot exploit advertising customers’ data to give itself an unfair advantage – and as such distort competition.
Having assessed the commitments and the feedback received, including from sellers, advertisers and customers, we believe both sets of commitments address the specific competition concerns we had here in the UK.
Notes to editors
- The acceptance of these commitments marks the end of the CMA’s Competition Act 1998 (CA98) investigations into Amazon Marketplace and Meta’s use of advertising data. The CMA, working with the appointed independent trustees, will monitor Amazon’s and Meta’s compliance with the commitments and the CMA will intervene if it suspects a breach.
- The commitments provided by Amazon and Meta are done so voluntarily. Commitments are designed to address the CMA’s competition concerns; the giving of commitments does not imply a finding that competition law has been infringed.
- Amazon Marketplace is an e-commerce platform which is owned and operated by Amazon Inc. In 2019, an estimated 280,000 independent sellers used Marketplace to connect with customers.
- The ‘Buy Box’ (also known as the ‘Offer Display’) is displayed prominently on Amazon’s product pages and provides customers with one-click options to ‘Buy Now’ or ‘Add to Basket’ in relation to items from a specific seller.
- According to Statista, Amazon’s net UK sales amounted to nearly $30 billion in 2022 – making the UK its second-largest European market.
- The CMA opened its investigation in July 2022 further to it having reasonable grounds to suspect that Amazon had infringed the Chapter II prohibition of the CA98. The Chapter II prohibition of CA98 prohibits the abuse of a dominant position by one or more undertakings which may affect trade within the UK or part of it.
- Amazon’s commitments will be implemented within 6 months and will remain in force until June 2028 unless they are varied, substituted or released as provided for in the commitments.
- The responses to the CMA’s separate consultations on Amazon’s and Meta’s commitments are summarised, on an anonymous basis, in the CMA’s respective decisions. As is usual process, the CMA does not intend to publish the full responses.
- Facebook is owned by Meta. Facebook Marketplace is a feature in Meta’s Facebook app and on desktops and tablets that allows users to post or browse classified ads items for sale.
- For Facebook Marketplace, the CMA opened its investigation in June 2021, having reasonable grounds to suspect that Meta may have infringed the Chapter II prohibition of CA98. The Chapter II prohibition of CA98 prohibits the abuse of a dominant position by one or more undertakings which may affect trade within the UK or part of it.
- Meta’s commitments package is for a 5-year period once the required changes are implemented unless it is varied, substituted or released as provided for in the commitments.
- These investigations use the CMA’s enforcement powers under the Competition Act 1998. A Digital Markets Unit has also been established within the CMA which, in future, is expected to oversee a new regulatory regime for the most powerful digital firms, promoting greater competition and innovation in these markets and protecting consumers and businesses from unfair practices. The legislation which will give the CMA these powers is currently being considered by the UK Parliament.
- Media queries should be directed to [email protected] or 020 3738 6460.