The Competition Act 1998 (CA98) investigations by the Competition and Markets Authority (CMA) into Amazon and Meta's use of advertising data have finally ended as the two tech giants have signed two commitments promoting fair competition.
In a news post today, the CMA announced it has secured commitments from Amazon and Meta regarding their digital marketplaces, Amazon Marketplace and Facebook Marketplace, respectively.
Sarah Cardell, Chief Executive of the CMA, said:
“We welcome the constructive resolution of our concerns in a way that benefits people and businesses and expect to see more of this kind of resolution once the Digital Markets, Competition and Consumers Bill comes into force.”
Amazon has agreed to ensure that third-party Marketplace sellers can compete on “a level playing field.” This would also allow UK customers to enjoy the best deals and ensure competitors would be given a fair chance to get featured in the “Buy Box” section on Amazon; the most common way sales take place on Amazon.
The Buy Box feature helps customers purchase highlighted products with just one click; they can choose to “Add to Basket” or “Buy Now.”
Moreover, the CMA has convinced Amazon to restrict its use of Marketplace data received from third-party sellers. Amazon will also be required to enable sellers to negotiate delivery charges with independent providers of Prime delivery services.
To ensure these commitments are implemented, Amazon’s activities will remain under the UK watchdog’s radar through the appointment of an independent trustee approved by the CMA itself.
This decision marks the end of the investigation initiated in July 2022 that Amazon was providing unfair benefits to its retail businesses over independent competing sellers.
Likewise, Meta has also agreed to commitments that prohibit it from exploiting valuable advertising customers’ data to ensure business and customer privacy.
Initially, Meta faced investigations from the CMA in June 2021, where it was suspected to infringe a competition law regarding abuse of a dominant position by one or more undertakings, thus, affecting trade in the UK.
With the agreement in place, sellers that rely on Facebook Marketplace to advertise their products can choose to prevent their data from being used to enhance the Facebook Marketplace
Additionally, Meta has agreed to restrict the ways it uses advertising data when developing products.
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