The UK competition watchdog launched an investigation into whether Amazon has a dominant market position this morning and if it was abusing this power.
The Competition and Markets Authority’s (CMA) probe will hinge on whether the US giant is giving an unfair advantage to its own retail business or sellers, compared to other third-party sellers on the Amazon UK Marketplace.
Highlighting the popularity of Amazon, General Counsel at the CMA Sarah Cardell said: “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 European Commission is also investigating similar concerns, and the CMA will seek to liaise with Brussels on the matter moving forward.
However, Robert Eriksson, Managing Associate at Stevens & Bolton LLP told City A.M. that this was the “Brexit effect”, where the CMA can “piggyback” off Europe: something that wasn’t possible when UK was an EU member.
It also therefore means that companies can face parallel proceedings from the EU and the UK.
This was echoed by Senior Counsel at Charles Russell Speechlys Paul Stone who told City A.M. that the latest UK investigation looked like a “carbon copy” of its European counterparts.
“It is possible that the CMA may have been holding off in anticipation of the Digital Markets Bill, but, as that has been delayed, it has decided to use its existing powers to take action”, he said.
However, it should be noted that whilst the Commission may issue fines in relation to pre-Brexit conduct affecting the UK in its cases against Amazon, it cannot accept or (if it gets to the point of reaching an infringement decision) request changes from Amazon on a forward looking basis which cover the UK.
Any such commitments accepted by the Commission would relate to the EU and therefore would not cover the UK.
Eriksson also told City AM. that while CMA’s demonstrates its willingness to tackle suspected competition infringements, “a separate regulatory regime may be needed to tackle the alleged abuses more effectively.”
As it stands, the CMA have only established the Digital Markets Unit on a non-statutory basis.
Rocio Concha, Which? Director of Policy and Advocacy, said while the CMA’s probe was welcomed, these cases can be slow, and UK consumers would be “better served” by a dedicated DMU that can enforce a pro-competition regime.
An Amazon spokesperson said it would work closely with the CMA, but added that it had worked hard to help small businesses on Amazon.