Amazon on Tuesday agreed to give merchants operating in the European Union more access to valuable real estate on its website, the European Commission said Tuesday, in a deal that ends antitrust investigations by regulators who said the company had used its size and power to stifle competition in the bloc.
The settlement helps Amazon avoid what could have been a multibillion-dollar fine, while giving the European Commission, the European Union’s executive branch, a victory in delivering long-sought changes to the world’s dominant online shopping platform. Under the deal, the company will also be barred from using nonpublic information it gathers about independent merchants to inform Amazon’s own product choices.
The deal is an attempt to put more guardrails between Amazon’s role as a digital storefront that many merchants depend on to reach customers, and as a maker of products that often compete with those outside sellers. The dual roles have created a conflict of interest, critics say, allowing Amazon to favor its own products and services over small rivals who have few other ways to reach customers online.
More on Big Tech
- Amazon: The e-commerce giant agreed to a settlement with European Union regulators that will force the company to make changes to its practices but also allow it to avoid billions of dollars of potential fines.
- Microsoft: The Federal Trade Commission sued to block the company’s $69 billion acquisition of the video game maker Activision Blizzard.
- Meta: John Carmack, a pioneer of virtual reality technology, is leaving Meta after more than eight years at the company.
- Foreign Workers: As cutbacks batter the tech industry, some foreigners on work visas are facing a daunting prospect: having to leave the United States unless they are hired within 60 days of being laid off.
“Today’s decision sets new rules for how Amazon operates its business in Europe. Amazon can no longer abuse its dual role and will have to change several business practices,” said Margrethe Vestager, the European Commission’s executive vice president who oversees digital policy and antitrust enforcement. “Competing independent retailers and carriers as well as consumers will benefit,” she said.
An Amazon spokesperson said the company was “pleased that we have addressed the European Commission’s concerns.”
“While we continue to disagree with several of the preliminary conclusions the European Commission made,” the spokesperson said, “we have engaged constructively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium sized businesses selling through our stores.”
Already seen as the world’s most active regulator of the tech industry, the European Union is now acting even more aggressively. On Monday, antitrust regulators brought charges against Meta that could result in billions of dollars worth of fines for anticompetitive practices related to its marketplace service for selling goods. Apple and Google are also under investigation for possible antitrust violations.
Companies are also racing to comply with new E.U. laws passed this year that target the tech sector and take effect by 2024. The rules give regulators even more authority to crack down on what is seen as anticompetitive business practices and force social media companies to police user-generated content more actively.
The Amazon deal announced on Tuesday closely tracks with a preliminary deal announced in July. Under the settlement, Amazon has agreed to:
Give independent merchants equal access to the Buy Box — the purchase area with prominent buttons on a product’s listing that prompt customers to “Buy Now” or “Add to Cart.” Amazon said it would create a second offer box if there was a sufficient difference in price or time of delivery.
Stop using nonpublic data about merchants that sell on its website, including sales terms, revenue and inventory, that Amazon could use to make decisions about what competing products to create, 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 lasts for five years and legally applies only to Amazon’s operations in the European Union.