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Today, the Commission has decided to accept commitments offered by Amazon. These commitments address our preliminary competition concerns about Amazon practices on its e-commerce marketplace.

Before describing the commitments, let me recall those concerns.

Our preliminary competition concerns

Amazon's practices raised three competition concerns.

The first one was about the use of big data and Amazon's dual role as both a marketplace and a competitor to sellers active on its marketplace.

The second concern was about the rules of access set by Amazon for sellers to appear in the Buy Box.

The third concern was about the rules of access set by Amazon for sellers and carriers to participate in the Prime Programme.

When it comes to the data concern, Amazon gathers a lot of data from the activities of independent sellers on the marketplace. It then uses the data collected on the marketplace for its own retail activities. In fact, Amazon's retail operations get many insights from sensitive business data of 800 000 active sellers in the EU. Amazon uses this data to make business decisions in its retail operations. So we were concerned that Amazon is able to take less risks than competing retailers active on its platform. This is because competing retailers have no access to such data. Therefore, our preliminary conclusion was that this use of data was an abuse of a dominant position by Amazon as a marketplace service provider in France and Germany.

The second concern relates to the Buy Box, the box that you see when looking for a specific product on Amazon. The Buy Box offers the option to click and to buy easily and fast. The Buy Box represents over 90% of all views of offers on Amazon and the same high share of all transactions. So it is very important for sellers to have an unbiased access to that box. But we had concerns that the access to the box was favouring Amazon's retail operations.

Our third concern was on the Amazon Prime Programme. The Prime Programme is a premium service offering benefits to users against the payment of a fee. Prime users are rapidly growing in Europe. They are also the highest spending and most loyal consumer group on the Amazon marketplace. Unbiased access to Prime is therefore crucial for sellers. But we had concerns that access to Prime was favouring Amazon's retail and logistics operations.

The commitments process

Earlier this year, Amazon offered a set of commitments.

We market tested this package over the summer, to get feedback on whether the commitments could work and address our concerns.

A number of sellers, among them book publishers, seller associations, carriers, consumer associations, and academics gave feedback. We looked very carefully at those comments and asked Amazon to improve the commitments. Amazon then offered improved remedies. Today's decision makes them binding on Amazon.

What has Amazon agreed to change?

The commitments cover obligations that will reshape three central pillars of Amazon's marketplace ecosystem: first, its use of data, second, the conditions of access to the Buy Box and third, the conditions of access to the Prime programme.

So first, when it comes to data, Amazon will refrain from using non-public seller data to the benefit of its retail operations. This is the equivalent to creating a data silo. It means that Amazon will not be able to use insights about other sellers' operations on its platform to optimise its own retail decisions. This commitment applies to both Amazon's employees and algorithmic tools that largely drive its business decisions.

In concrete terms, the data commitment explicitly prevents the use of non-public seller data for Amazon's decisions. Currently, Amazon uses the data to take decisions such as which product to launch, which price to set, which suppliers to choose, or how to manage inventories. The commitment will prevent this from happening and cover all types of seller data. Such seller data covers sales, revenues, shipments, the transaction prices, the performance, or consumer visits. The commitment applies to both individual and aggregate data. And importantly, the commitment applies to the use of seller data for the purposes of selling branded goods as well as Amazon's private label products.

This data commitment will prevent Amazon from calibrating its business decisions using data generated by the activities of independent sellers. This will restore a level-playing field on the platform.

Second, under the Buy-Box commitment, Amazon will apply non-discriminatory conditions and criteria for the selection of offers to appear in the Buy Box. This applies to all steps of the ranking and selection process, and to all metrics that influence the Buy Box selection.

In addition, Amazon commits to display a second Buy Box. The second Buy Box will appear immediately below the first one. It will appear when there is a second offer that is different from the first one on price or delivery. As Amazon cannot populate both Buy Boxes with its own retail offers, this will give more visibility to independent sellers.

The presentation of the second Buy Box is important to attract consumer attention towards a greater variety of offers. The Commission will therefore monitor the performance of the second buy box. We will be able to request adjustments to the presentation in case consumers do not seem sufficiently attracted to it.

Third, the Prime commitment has four sets of changes. First, Amazon will apply non-discriminatory conditions and criteria for sellers to qualify for the Prime Programme. This means that there will be no discrimination between Amazon offers and offers of sellers that use independent carriers for Prime deliveries.

Second, Prime sellers will be free to choose any carrier for their logistics and delivery services. They will be able to negotiate terms directly with the carrier of their choice. Today, this is not possible as carriers can only deliver Prime parcels if they are qualified by Amazon.

Third, Amazon commits that no data generated by the activity of other carriers would flow to Amazon logistics.

Fourth, Amazon will no longer prevent carriers to contact the end customer directly by email to track their parcels. Today, Amazon is in control of the communication between customers and the carrier.

Amazon's compliance with all the aspects of the package will be ensured by both a complaint mechanism and a monitoring trustee. The complaint mechanism will be open to sellers and carriers to report suspected non-compliance.

The commitments will therefore bring fundamental changes to the way Amazon operates in Europe to the benefit of customers, sellers and carriers.

Conclusion

Today's commitments end two investigations into Amazon's business practices. In the first investigation, on the data use, we issued a Statement of Objections two years ago. In the second investigation, on the Buy Box and the Prime Programme, we opened the formal investigation two years ago. Amazon will have to implement these commitments in 6 months, by June 2023.

This means that by next summer, Amazon will have to end any preferential treatment towards its own retail and logistics operations in Europe. It will open up its Prime Programme and display a second Buy Box. Part of these changes concern business practices that are covered by the DMA and others that are not. Specifically, the second Buy Box and the Prime commitments address our competition concerns but would not be covered by the DMA.

So today's decision sets the rules that Amazon will need to play by in the future instead of Amazon determining these rules for all players on its platform. With these new rules, competing independent retailers, carriers and European customers will have more opportunities and choice.

Thank you.

MORE ABOUT commitments by Amazon

Antitrust: Commission accepts commitments by Amazon barring it from using marketplace seller data, and ensuring equal access to Buy Box and Prime

The European Commission has made commitments offered by Amazon legally binding under EU antitrust rules. Amazon's commitments address the Commission's competition concerns over Amazon's use of non-public marketplace seller data and over a possible bias in granting to sellers access to its Buy Box and its Prime programme.

The Commission's concerns

In July 2019, the Commission opened a formal investigation into Amazon's use of non-public data of its marketplace sellers. On 10 November 2020, the Commission adopted a Statement of Objections in which it preliminarily found Amazon dominant on the French and German markets, for the provision of online marketplace services to third-party sellers. It also found that that Amazon's reliance on marketplace sellers' non-public business data to calibrate its retail decisions, distorted fair competition on its platform and prevented effective competition.

In parallel, on 10 November 2020, the Commission opened a second investigation to assess whether the criteria that Amazon sets to select the winner of the Buy Box and to enable sellers to offer products under its Prime Programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.

In the second investigation, the Commission preliminarily concluded that Amazon abused its dominance on the French, German and Spanish markets for the provision of online marketplace services to third-party sellers.

It also preliminarily concluded that Amazon's rules and criteria for the Buy Box and Prime unduly favour its own retail business, as well as marketplace sellers that use Amazon's logistics and delivery services.

The commitments

To address the Commission's competition concerns in relation to both investigations, Amazon initially offered the following commitments:

- To address the data use concern, Amazon proposed to commit:

not to use non-public data relating to, or derived from, the independent sellers' activities on its marketplace, for its retail business. This applies to both Amazon's automated tools and employees that could cross-use the data from Amazon Marketplace, for retail decisions;
not to use such data for the purposes of selling branded goods as well as its private label products.
- To address the Buy Box concern, Amazon proposed to commit to:

treat all sellers equally when ranking the offers for the purposes of the selection of the Buy Box winner;
display a second competing offer to the Buy Box winner if there is a second offer from a different seller that is sufficiently differentiated from the first one on price and/or delivery. Both offers will display the same descriptive information and provide the same purchasing experience.
- To address the Prime concerns Amazon proposed to commit to:

set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers to Prime;
allow Prime sellers to freely choose any carrier for their logistics and delivery services and negotiate terms directly with the carrier of their choice;
not use any information obtained through Prime about the terms and performance of third-party carriers, for its own logistics services.
Between 14 July 2022 and 9 September 2022, the Commission market tested Amazon's commitments and consulted all interested third parties to verify whether they would remove its competition concerns. In light of the outcome of this market test, Amazon amended the initial proposal and committed to:

Improve the presentation of the second competing Buy Box offer by making it more prominent and to include a review mechanism in case the presentation is not attracting adequate consumer attention;
Increase the transparency and early information flows to sellers and carriers about the commitments and their newly acquired rights, enabling, amongst others, early switching of sellers to independent carriers;
Lay out the means for independent carriers to directly contact their Amazon customers, in line with data-protection rules, enabling them to provide equivalent delivery services to those offered by Amazon;
Improve carrier data protection from use by Amazon's competing logistics services, in particular concerning cargo profile information;
Increase the powers of the monitoring trustee by introducing further notification obligations;
Introduce a centralised complaint mechanism, open to all sellers and carriers in case of suspected non-compliance with the commitments.
Increase to seven years, instead of the initially proposed five years, the duration of the commitments relating to Prime and the second competing Buy Box offer.
The Commission found that Amazon's final commitments will ensure that Amazon does not use marketplace seller data for its own retail operations and that it grants non-discriminatory access to Buy Box and Prime. The Commission decided to make them legally binding on Amazon.

The offered commitments cover all Amazon's current and future marketplaces in the European Economic Area. They exclude Italy for the commitments relating to the Buy Box and Prime in view of the decision of 30 November 2021 of the Italian competition authority imposing remedies on Amazon with regard to the Italian market.

The final commitments will remain in force for seven years in relation to Prime and the display of the second competing Buy Box offer, and five years for the remaining parts of the commitments. Under supervision of the Commission, an independent trustee will be in charge of monitoring the implementation and compliance with the commitments.

If Amazon were to breach the commitments, the Commission could impose a fine of up to 10% of Amazon's total annual turnover, without having to find an infringement of EU antitrust rules or a periodic penalty payment of 5% per day of Amazon's daily turnover for every day of non-compliance.

Background

Amazon has a dual role as a platform. It runs a marketplace where independent sellers can sell products directly to consumers and at the same time, it sells products on its platform as a retailer, in competition with those independent sellers. As a result of this dual position, Amazon, has access to large data sets about the independent sellers' activities on its platform, including non-public business data.

Amazon's Buy Box, prominently displays the offer of one single seller and allows products to be swiftly purchased by directly clicking on a buy button. Amazon's Prime programme, offers premium services to customers for a fee and allows independent sellers to sell to Prime customers under certain conditions.

Article 102 of the Treaty on the Functioning of the European Union prohibits the abuse of a dominant position that may affect trade within the EU and prevent or restrict competition. The implementation of this provision is defined in the EU Antitrust Regulation (Regulation No 1/2003), which can also be applied by the national competition authorities.

Article 9 (1) of the EU Antitrust Regulation (Regulation 1/2003) allows the Commission to conclude antitrust proceedings by accepting commitments offered by a company. Such a decision does not reach a conclusion as to whether there is an infringement of EU antitrust rules but legally binds the company to respect the commitments. A policy brief on commitment decisions under Article 9 is available here.

More information, including the full text of today's Article 9 Commission decision and the full version of the commitments will be available on the Commission's competition website in the public case register under the case numbers AT.40462 and AT.40703.

Quote(s)
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. They cover the use of data, the selection of sellers in the Buy Box and the conditions of access to the Amazon Prime Programme. Competing independent retailers and carriers as well as consumers will benefit from these changes opening up new opportunities and choice.

Margrethe Vestager, Executive Vice-President in charge of competition policy - 20/12/2022