Amazon offers to level the playing field with third-party sellers to avoid EU fines

Illustration by Alex Castro / The Verge

Amazon has offered a number of concessions to third-party sellers on its platform in Europe in an attempt to settle an antitrust investigation.

The European Commission accused Amazon of abusing its dual-position as both marketplace operator and retailer, by collecting sales data from smaller vendors to outmaneuver them. Amazon has offered to refrain from using non-public data relating to, or derived from, the activities of independent sellers on its marketplace for its retail business that competes with those sellers.

It is thought that Amazon uses its insight into sales on its platform to make copies of popular products. The EU looked at more subtle ways that Amazon could use the data.

Changes to how it sells products to Prime subscribers and how it deploys its "Buy Box" feature are proposed by Amazon.

The Buy Box is much sought-after real estate due to the fact that only one seller is allowed to be featured. EU investigators said that Amazon's algorithms are not impartial and favor its own products, but that they had difficulty building a case against the company. In response, Amazon will apply equal treatment to all sellers when ranking their offers for the purposes of the selection of the winner of the Buy Box and will add a second Buy Box for products that aresufficiently differentiated from the first one.

Amazon is promising to let third-party sellers offer Prime delivery times without having to use Amazon's own logistics service, and is committing "not to use any information obtained through Prime about the terms and performance of third-party carriers, for its own logistics services." It isn't using private data it gathers from sellers to compete with them.

Before Amazon makes any changes, these concessions must be finalized. The European Commission wants Amazon's competitors to give feedback before September 9th. The agreement can be adjusted if necessary, though earlier reports suggest a deal is all but certain. If Amazon concessions are accepted, they will be in place for five years in the European Economic Area.

Amazon and the EU can claim some success in the investigation. The EU is able tout changes to the company's platform that will level the playing field in the world of online retail. The settlement doesn't include the inevitable appeals and court cases associated with a big tech fine.

Although the settlement announced today is Amazon's response to an antitrust investigation, it also looks ahead to the EU's Digital Markets Act. There are requirements for companies like Amazon to share more data with clients in order to level the playing field. Amazon is getting ahead of changes it will have to make in the future regardless of the outcome of the investigation.

Amazon disagrees with the Commission's conclusions in the case and has engaged with them to address their concerns and preserve our ability to serve European customers.