An Amazon sign is displayed inside an Amazon fulfillment center on November 23, 2022 in Rugeley, England.
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Amazon on Tuesday agreed to make some significant changes to its business in Europe as part of a deal to settle antitrust investigations that could result in a hefty fine for e-commerce giant.
The European Commission, the EU’s executive body, Tuesday’s announcement that Amazon has made a series of commitments to address allegations that the company is using independent seller data to its advantage.
The regulator has expressed concern with Amazon’s dual role as both a market and a competitor for sellers on its platform. For its part, Amazon says it is a supporter of small businesses in the area.
In November 2020, the Commission granted Amazon a statement of objection about the “systematic” use of non-public business data from independent sellers to benefit their own retail business.
It also opened a second investigation into claims that the criteria set by Amazon to select sellers featured in its “buy box” tool and allow sellers to offer products to users within Its Prime membership program offers incentives to Amazon retailers or sellers by using their own delivery service.
On Tuesday, the Commission said Amazon had assured it it would change some of those practices. One of the commitments is to stop using non-public data about independent sellers for its retail business or to sell branded goods and private label products.
The company also agrees to display a second buy box when a second offer is different from the first in terms of price or delivery, and let Prime sellers choose any carrier for logistics or delivery. their.
The changes only apply to the European Economic Area. In Italy, Amazon has agreed separate legal remedy with the country’s competition regulator in relation to buy boxes and Prime. Amazon will have until June 2023 to make the changes.
Margrethe Vestager, the EU’s competition chief, said in a statement on Tuesday: “Today’s decision sets out the rules that Amazon will need to follow in the future rather than Amazon defining these rules for all players on its platform”.
“With these new rules, competing independent retailers, carriers and European customers will have more opportunity and choice.”
If the company is found guilty, it could face fines of up to 10% of its annual global revenue. For Amazon, a company that generated $469.81 billion in revenue in 2021, that could mean a record $47 billion fine.
However, the EU can still fine Amazon 10% of its total annual revenue if it breaks its commitment, or periodically fine 5% of its daily revenue for each day of non-compliance.
Amazon said in a statement that it was “delighted that we have addressed the European Commission’s concerns and addressed these.”
“While we continue to disagree with some of the preliminary conclusions reached by the European Commission, we have engaged constructively to ensure that we can continue to serve our customers across the world. across Europe and supporting Europe’s 225,000 SMEs to sell through our stores,” an Amazon spokesperson told CNBC by email.
The development marks a subtle victory for the EU, which is pursue seismic changes to the business models of American tech giants with its Digital Markets Act. The law, which went into effect last month, is intended to prevent so-called “gatekeepers” companies from abusing their market positions to the detriment of smaller rivals.
It has caused significant changes for some of these companies. Applefor example, reported working on changes that will allow users to “side-load” the app from the web, bypassing the App Store, to make your business DMA compliant.