After investigations into their businesses, Amazon and Facebook parent Meta have committed to actions to ensure fair competition on their retail platforms, according to UK regulator Competition and Markets Authority (CMA).
The CMA opened its investigation into Amazon in July 2022 and secured the following commitments on November 3, 2023:
- Ensure Amazon does not use rival sellers’ Marketplace data to gain an unfair advantage over other sellers. This follows concerns that Amazon’s access to commercially sensitive data relating to third-party sellers helped its retail business to decide which products to sell, manage stock levels for those products, set prices and make other important commercial decisions.
- Guarantee all product offers are treated equally when Amazon decides which will be featured in the ‘Buy Box’. This relates to concerns that products being offered by third-party sellers were less likely to appear in the Buy Box than similar offers from either Amazon’s own retail business or third-party sellers that use Amazon’s delivery services.
- Allow third-party businesses using Marketplace to negotiate their own rates directly with independent providers of Prime delivery services so that customers can benefit from lower delivery costs where better rates are negotiated.
Amazon is also required to appoint an independent trustee who will monitor the company’s compliance with its commitments, which will be implemented within 6 months and will remain in force until June 2028.
The CMA opened its investigation into Facebook parent Meta in June of 2021 and investigated whether Meta had gained an unfair advantage over competitors, particularly those that provide services for online classified ads. The CMA said it was concerned that Meta was able to use certain ad data gathered from businesses using its advertising services to develop and improve its own products in competition with those advertising customers:
“For example, data gathered from users’ interactions with third-party ads on Facebook could provide Meta with knowledge as to whether a user is interested in a particular product, such as trainers, which could then in turn encourage Meta to target that user with its own Marketplace listings for trainers.”
Among the commitments Mega agreed to make:
- Opt-out option for Marketplace: Meta’s advertising customers can ‘opt out’ of their relevant ad data being used by Meta to operate or improve Facebook Marketplace. This includes data that illustrates how users engage with their ads and can indicate to Meta which products or services a user is interested in. This commitment will be achieved via the implementation of a technical system for Facebook Marketplace to prevent Meta’s use of such data.
- Further limitations on Meta’s use of ad data in product development: Beyond Marketplace, Meta will limit its use of ad data derived from digital display advertising and business tool services, which identifies advertisers. It will issue a statement in its published Code of Conduct that states such data should not be used to develop Meta products that compete with those advertisers. The Code sets out the standards to which Meta holds itself and its expectations for how Meta’s employees should act. Meta also commits to taking the necessary steps to ensure its employees working on product development do not use such information to develop and improve Meta’s products in the UK in competition with advertisers.
The CMA said a monitoring trustee will be appointed and will provide the CMA with reports on Meta compliance and any failures. The trustee will also oversee the implementation of new technical systems and employee training.
“Having accepted the commitments, the CMA will not be continuing its investigation nor proceeding to a decision on whether the CA98 has been infringed” for either company, it stated.
