The UK’s competition watchdog has launched an investigation into online retail giant Amazon, which is alleged to have breached competition law by promoting its own products on its marketplace over third-party merchants.
The investigation from the Competition and Markets Authority (CMA) follows the launch of an ongoing probe from the European Commission over similar concerns.
The European Commission has previously opened two investigations covering the same areas. The CMA has said it will liaise with its EU counterpart to progress the investigation.
Amazon’s marketplace contains both products sold by the company and products listed by third-party sellers.
The CMA’s investigation will establish whether Amazon has a dominant position and whether it is using that to give an unfair advantage to its own product line over third-party competitors.
The probe will have three main focus areas: how Amazon collects third-party seller data, how Amazon sets criteria to label products as ‘preferred choice’, and how Amazon determines product eligibility for benefits under the Prime service.
The CMA is concerned because the enormous reach of the company means “millions of people across the UK rely on Amazon’s services,” said Sarah Cardell, general counsel at the CMA.
“This is an important area so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services.”
The Amazon probe from the CMA follows a number of investigations into Big Tech by the UK regulator.
The CMA is already investigating Amazon, as well as Google, regarding a suspected breach of consumer protection laws by not combating fake reviews of products effectively.
An investigation into Facebook parent company Meta was launched by the watchdog last year concerning its acquisition of GIPHY. The CMA ruled that the acquisition created unfair dominance in online advertising.
Meta appealed the decision, however, a tribunal dismissed all but one of the social media company’s claims.
The CMA has also launched an investigation into Microsoft’s merger with Activision Blizzard.
An Amazon spokesperson said: “We have always worked to offer market leading choice, price and convenience for customers. More than 65,000 small and medium-sized business in the UK sell on Amazon, which support more than 175,000 jobs across the country and provide a great experience and choice for customers.
“We will work closely with the CMA to show that we, above all else, continue to earn the trust of our customers.”