Amazon has agreed to give merchants operating in the European Union access to valuable real estate on its website, the European Commission said on Tuesday. Vol.
The solution Amazon is helping to avoid multibillion-dollar fines, while the European Commission, the European Union’s executive arm, is making a breakthrough in delivering long-awaited changes to the world’s dominant online shopping platform. Under the agreement, The company would also be barred from using non-public information it collects about independent merchants to inform Amazon’s own product selections.
The deal is an attempt to put more safeguards between Amazon’s roles as a digital storefront that many merchants rely on to reach customers and as a maker of products that often compete with outside sellers. The dual roles have created a conflict of interest, critics say, allowing Amazon to showcase its own products and services in few other ways to reach customers online than smaller competitors.
“Today’s decision sets new rules for how Amazon operates its business in Europe,” said Margrethe Vestager, executive vice-president of the European Commission, which oversees digital policy and antitrust enforcement. “Amazon can no longer abuse its dual role and must change many business practices.”
He added, “Competitive independent retailers and carriers and consumers will benefit.”
An Amazon spokesperson said, “The company is pleased that we have addressed the European Commission’s concerns.”
“While we continue to disagree with many of the initial decisions made by the European Commission,” the spokesperson said, “we are engaged creatively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium-sized businesses through our stores.”
Already seen as the world’s most active regulator in the technology sector, the EU is now acting even more aggressively. On Monday, antitrust regulators filed charges against Meta that could result in billions of dollars in fines for anticompetitive practices related to its marketplace service for selling products. Apple and Google are under investigation for antitrust violations.
Companies are also racing to comply with new EU laws targeting the tech sector that will come into effect by 2024. Regulations give regulators even more power to prevent detection. Anti-competitive business practices And social media companies need to more actively monitor user-generated content.
Amazon’s deal announced Tuesday closely follows a preliminary deal announced in July. Under the agreement, Amazon agreed to:
Give independent merchants equal access to the Buy Box, a purchase area with prominent buttons on a product’s list prompting customers to “Buy Now” or “Add to Cart.” Amazon said it will create a second offer box if there’s enough of a difference in price or delivery time.
Stop using non-public data about merchants who sell on its website, including terms of sale, revenue and inventory, that Amazon can use to make decisions about what competing products to make, sell and promote.
Allow outside sellers to participate in Amazon’s Prime program, even if they don’t use Amazon’s logistics business, if they meet certain standards for delivery and service reliability.
The settlement will last for five years and will only legally apply to Amazon’s operations in the EU.
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