The use of data determined Britain’s competition authorities to open a formal investigation into Amazon. The Financial Times announced it citing three people, familiar with what happens.
Investigators watch the use of data
The Competition and Markets Authority (CMA), an independent British regulator, has been studying Amazon for months. The CMA is focusing on how the e-commerce giant uses information it gathers to improve its products and services.
The regulator has also looked into the Amazon sales ranking algorithm for deciding which websites appear in its ‘buy box’. This is a white panel to the right of a product where buyers add their items to cart. Therefore, the results suggest that websites that have been selling for more than a year may have an unfair advantage. Thus, they sell more items than others.
But Amazon did not comment on the use of data allegations. Still, an internal investigation may decide whether the platform favors its own products. This would happen when deciding which products appear in customer shopping carts.
Amazon is under pressure
The sources said that Amazon’s Prime customers and its prominent position might entice merchants to use the company’s services.
The investigation is likely to focus on whether Amazon is abusing its buying power to the detriment of competitors. So, two investigations are underway, right now into the e-commerce giant. Thus, one of them is in the European Union, and the other one in the United States. Both are looking at how Amazon chooses which products to sell through its own online marketplace.
In fact, The Digital Markets Unit (DMU) in the UK also started checking the dominance of Amazon, Google and Facebook, back in April. The institution decided to create new codes of conduct for such companies.
The new unit should also watch the relationships that giant companies have with both advertisers and content providers.