Tech giants Amazon and Microsoft both face investigations from the UK’s competition watchdog over anti-competitive practices, it was revealed today. The Competition and Markets Authority has opened a probe into claims Amazon favours its own products and services on its marketplace, and will separately investigate Microsoft’s $68.7bn takeover of games company Blizzard.
Amazon has been facing a similar investigation in Europe, though reports today suggest it has done a deal with the European Commission to remove its concerns around anti-competitive practices. The Microsoft-Blizzard deal, meanwhile, is already being reviewed in the US.
UK CMA has Amazon anti-competition concerns
The Amazon investigation will look at products sold on Amazon’s marketplace, which are supplied through its own retail business and third-party sellers.
Amazon provides services to these sellers, promoting products and offering options around delivery and packaging through its ‘Fulfilment by Amazon’ service. The CMA investigation will consider whether Amazon has a dominant position in the UK and whether it is abusing that position by prioritising its own retail business or sellers that use its services over other third-party sellers on the marketplace.
The investigation will look at how Amazon collects and uses third-party seller data, including whether this gives the company an unfair advantage in relation to business decisions made by its retail arm. It will also probe how it sets criteria for products which appear in the ‘Buy Box’ promotional area on the marketplace, and also how it chooses which products feature in its Prime enhanced delivery service.
“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market,” said Sarah Cardell, general counsel at the CMA. “Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower-quality items or having less choice. A formal investigation will allow us to consider this matter properly.”
The CMA says it will seek to liaise with the European Commission, which has two similar investigations open into Amazon’s behaviour. However, the FT reported this morning that Amazon has struck a deal with the Commission, which will see it share more data with third parties in a bid to address concerns. This would need to be approved by some of Amazon’s competitors before the investigation is dropped, the report says.
The first stage of the UK inquiry will run until September.
Microsoft’s Blizzard deal could spark UK anti-competition probe
Separately the CMA is considering whether to launch an in-depth investigation into Microsoft’s proposed acquisition of Blizzard, which was announced earlier this year.
It said it is “considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
The CMA has until 1 September to decide whether to launch a Stage 1 probe under the act. This would be the first step towards potentially blocking the deal.
Microsoft is already preparing to face regulators in the US, where the FTC is investigating the takeover, while the European Commission and China are both expected to launch similar action.