Summary of Commission Decision of 20 December 2022 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement (Cases AT.40462 – Amazon Marketplace and AT.40703 – Amazon Buy Box) (notified under document C(2022) 9442 final) (Only the English text is authentic) (Text with EEA relevance) 2023/C 87/05
Date: 2022-12-20
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, control of restrictive practices, dominant position, electronic commerce, restrictive trade practice, retail trade, trade information








C_2023087EN.01000701.xml










9.3.2023   


EN


Official Journal of the European Union


C 87/7






Summary of Commission Decision
of 20 December 2022
relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement
(Cases AT.40462 – Amazon Marketplace and AT.40703 – Amazon Buy Box)


(notified under document C(2022) 9442 final)


(Only the English text is authentic)
(Text with EEA relevance)
(2023/C 87/05)

On 20 December 2022, the Commission adopted a decision relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA agreement. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 (1)
, the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.

1.   INTRODUCTION









(1)


The Decision makes legally binding the commitments offered by Amazon.com, Inc., Amazon Services Europe S.à.r.l., Amazon EU S.à.r.l. and Amazon Europe Core S.à.r.l., (together referred to as ‘Amazon’) under Article 9 of Council Regulation (EC) No 1/2003 (‘Regulation 1/2003’) in proceedings under Article 102 of the Treaty on the Functioning of the European Union (the ‘Treaty’) and Article 54 of the EEA Agreement.












(2)


The Decision concerns the following two separate investigations under Article 102 of the Treaty:






—


the business practices of Amazon investigated by the Commission under case AT.40462 – Amazon Marketplace, relating to the use of non-publicly available data regarding third-party sellers’ listings and transactions, by Amazon, for the purposes of its retail operations (the ‘Data-use Conduct’);










—


the business practices of Amazon investigated by the Commission under case AT.40703 - Amazon Buy Box, relating to (i) the conditions and criteria that govern the selection of the offer that features in the ‘Buy Box’ (the ‘Buy Box-related Conduct’), and to (ii) the conditions and criteria that govern the eligibility of third-party sellers to Prime and of their offers to the Prime label (the ‘Prime-related Conduct’).








2.   PROCEDURE









(3)


The cases against Amazon originated out of the Commission’s own initiative.












(4)


On 17 July 2019, the Commission initiated proceedings in case AT.40462 – Amazon Marketplace pursuant to Article 2(1) of Commission Regulation No 773/2004.












(5)


On 10 November 2020, the Commission sent a Statement of Objections (the ‘SO’) to Amazon in case AT.40462 – Amazon Marketplace and on the same date it initiated proceedings in case AT.40703 – Amazon Buy Box with a view to adopting a decision under Chapter III of Regulation No 1/2003.












(6)


In case AT.40703 – Amazon Buy Box, on 15 June 2022, the Commission adopted a Preliminary Assessment (the ‘PA’) pursuant to Article 9(1) of Regulation No 1/2003. This PA was notified to Amazon by letter of 16 June 2022.












(7)


On 8 July 2022, Amazon submitted commitments (the ‘Initial Commitments’) to the Commission in order to meet the preliminary concerns set out in the SO and the PA.












(8)


On 20 July 2022, a notice was published in the Official Journal of the European Union pursuant to Article 27(4) of Regulation No 1/2003 (the ‘Notice’), summarising the cases and the proposed commitments and inviting interested third parties to give their observations on the proposed commitments within just short of 2 months following publication.












(9)


On 20 September 2022, the Commission informed Amazon of the observations received from interested third parties following the publication of the Notice. On 22 November 2022, Amazon submitted an amended proposal for commitments (the ‘Final Commitments’).












(10)


On 12 December 2022, the Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion.












(11)


On 13 December 2022, the Hearing Officer issued his final report.




3.   THE COMMISSION’S COMPETITION CONCERNS

3.1.   Facts









(12)


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.












(13)


Sales on all of Amazon’s European websites are driven, to a very large extent, by the system of the so-called ‘Buy Box’. 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. Becoming the Featured Offer (i.e. winning the Buy Box) is essential for third-party sellers to be visible to consumers and to convert their offers into actual sales, as the vast majority of sales on Amazon’s websites is realised via the Buy Box.












(14)


In addition to allowing consumers to buy products offered on its websites, Amazon also offers additional optional services to consumers. In particular, Amazon developed the Amazon Prime membership programme, a paid subscription service that provides consumers access to a number of additional services such as faster delivery, access to music and video streaming services, gaming services and a number of other shopping benefits. Amazon’s Prime programme also allows independent sellers to sell to Prime customers under certain conditions.




3.2.   Legal Assessment









(15)


In the SO, the Commission came to the preliminary conclusion that Amazon holds a dominant position on the national markets for the provision of marketplace services in Germany and France and that the Data-use Conduct amounts to an abuse of Amazon’s dominant position in breach of Article 102 of the Treaty.












(16)


The Commission preliminarily found that: (i) the systematic reliance by Amazon Retail’s automated systems and employees on its online retail competitors’ non-public data, obtained in the context of the provision of Amazon’s dominant marketplace services to those sellers, shields Amazon Retail from some of the normal risks and costs of retail competition, and (ii) consequently, by recourse to methods that do not constitute competition on the merits, Amazon distorts competition with third-party sellers. This allows Amazon to leverage its dominant position on the markets for the provision of marketplace services into online retail markets.












(17)


In the PA, the Commission came to the preliminary conclusion that Amazon holds a dominant position on the national markets for the provision of marketplace services, at least in Germany, France and Spain, and expressed the preliminary concern that Amazon would have abused its dominant position in breach of Article 102 of the Treaty by artificially favouring its own retail offers and offers of marketplace sellers that use Amazon’s logistics and delivery services (the so-called ‘Fulfilment by Amazon’ or ‘FBA’ services), to the detriment of other marketplace sellers and consumers, when (i) selecting the single prominently displayed offer on Amazon’s product detail page (the winner of the ‘Buy Box’); and (ii) enabling sellers to offer products to users of Amazon’s loyalty programme (the ‘Prime programme’) under the Prime label.












(18)


The Buy Box prominently displays the offer of one retailer for a specific product and allows customers to add that item directly into their shopping carts. Winning the Buy Box is crucial to Amazon marketplace sellers as the vast majority of consumers only view the Buy Box and only buy the offer displayed in the Buy Box. The unequal conditions and criteria of selection of the Buy Box winner may thus artificially increase traffic to, and purchases of, offers by Amazon’s retail arm and by sellers using Amazon’s FBA services, thereby distorting competition on the Amazon marketplaces.












(19)


Reaching Prime users is important to sellers as the number of Prime users is continuously growing, as they are typically more loyal, and because sellers’ eligibility to the Prime programme impacts their ability to win the Buy Box. Amazon’s conditions and criteria to select sellers and offers eligible to the Prime label would favour Amazon Retail and sellers that use Amazon’s FBA services, thereby distorting competition on the Amazon marketplaces. The unequal conditions and criteria of the Prime programme include those relevant to the choice, contractual terms and performance of the logistics service providers of independent sellers seeking eligibility to Prime.




4.   THE INITIAL, THE MARKET TEST AND THE FINAL COMMITMENTS

4.1.   The Initial Commitments









(20)


On 8 July 2022, Amazon submitted the Initial Commitments comprising three sets of commitments: the data-silo commitment, the Buy Box-related commitment and the Prime-related commitment.












(21)


Under the data-silo commitment, Amazon commits itself not to use non-public data provided by third-party sellers to Amazon in the context of their use of Amazon’s marketplaces services, or derived through third-party sellers’ use of Amazon marketplace services or related services such as payment and fulfilment services, for the purposes of Amazon’s own retail operations, in competition with those third-party sellers.












(22)


Under the Buy Box-related commitment, Amazon commits itself to apply non-discriminatory conditions and criteria for the purposes of identifying the Featured Offer displayed in the Buy Box. These would apply to all applicable parameters and weightings in order to establish a level-playing field for competition between all sellers for the Buy Box.












(23)


In addition, Amazon commits itself to display at least one competing offer next to the Featured Offer where available and different on price/delivery time from the Featured Offer (the ‘Second Displayed Offer’). The Featured Offer and the Second Displayed Offer will display on an equal basis the same descriptive information and operate at complete parity with respect to purchasing possibilities.












(24)


Finally, under the Prime-related commitment, Amazon commits itself to apply non-discriminatory conditions and criteria for (i) the Prime eligibility of third-party sellers and offers and (ii) the Prime label in order to ensure parity between all sellers and to allow Prime sellers to freely choose carriers and negotiate rates and commercial terms with those carriers. Amazon commits itself also to not use any data relating to the terms or performance of third-party carriers for the purposes of Amazon’s own logistics operations.












(25)


These Initial Commitments would apply for a duration of 5 years and cover all current and future Amazon marketplaces in the EEA, with the exception of the commitments described in recitals (22) to (24) above which, in view of the decision of 30 November 2021 of the Italian Competition Authority in case A528, would not apply to Italy.












(26)


An independent monitoring trustee would monitor Amazon’s compliance with the Initial Commitments, throughout their duration.




4.2.   The Market Test









(27)


The Commission published Amazon’s commitment proposal for a formal market test on 14 July 2022. In response, the Commission received 25 submissions from interested third parties (the ‘Market Test’).












(28)


The observations received mainly related to definitions used in the Initial Commitments, access control mechanisms in relation to non-public third-party seller data, the visual display of the Second Displayed Offer, information to third-party sellers about Amazon’s obligations under the commitments, the need for Amazon to share with carriers the contact details of the end-users to whom they deliver the parcels, the scope and duration of the commitments, the need to introduce a dispute resolution or complaint mechanism in case of suspected breach of the commitments, non-circumvention and monitoring of compliance.




4.1.   The Final Commitments









(29)


In response to the observations made, Amazon submitted a new set of commitments. The Final Commitments differ from the proposed Initial Commitments as follows:






—


They reinforce Amazon’s obligation to set up technical and/or manual control mechanisms designed to audit and monitor access by Amazon Retail to third-party seller data;










—


They improve the presentation of the Second Displayed Offer by making it more prominent and to include a review mechanism in case the presentation is not attracting adequate consumer attention;










—


They increase the transparency and early information flows to third-party sellers and carriers about the commitments and their newly acquired rights, enabling, amongst others, early switching of sellers to independent carriers;










—


They 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;










—


They improve carrier data protection from use by Amazon's competing logistics services, in particular concerning cargo profile information;










—


They increase the powers of the monitoring trustee by introducing further notification obligations;










—


They introduce a centralised complaint mechanism, open to all sellers and carriers in case of suspected non-compliance with the commitments;










—


They increase to seven years, instead of the initially proposed five years, the duration of the commitments relating to Prime and the Second Displayed Offer;










—


They introduce a few clarifications to the wording of the Initial Commitments.








5.   CONCLUSION









(30)


The commitments in their final form are sufficient to address the preliminary concerns identified by the Commission.












(31)


The data-silo commitment ensures that Amazon will put an end to its continued practice of using non-public data of third-party sellers to compete with these sellers. To address the Commission’s preliminary concerns, Amazon will refrain from using non-public data for the purposes of all of Amazon’s retail operations.












(32)


The Buy Box-related commitment will eliminate the biases that favour Amazon Retail and FBA sellers in the selection and display of the Featured Offer in the Buy Box. The Final Commitments also include a Second Displayed Offer to increase consumer choice. These changes are crucial given the importance of winning the Buy Box for third-party sellers to be visible to consumers and to convert their offers into actual sales.












(33)


The Prime-related commitment will also eliminate the biases that favour Amazon Retail and FBA sellers in their offers’ eligibility to Prime and to the Prime label. They also address the competitive disadvantage of third-party sellers that do not use Amazon’s FBA services to fulfil their sales in Amazon’s Prime system by carrier-related obligations that will allow for an effective choice of carriers that sellers can rely on for their parcel deliveries.












(34)


The Commission considers the duration of the Final Commitments to be proportionate, as it is sufficiently long to address the Commission’s preliminary concerns, while also providing certainty to market participants for a sufficiently long period. The implementation of the Final commitments will also be subject to independent expert review by a monitoring trustee, acting under the Commission’s supervision, for the entire duration of the Final Commitments. The use of a monitoring trustee is a proportionate and necessary measure for ensuring effective implementation of the Decision.












(35)


The Commission considers that the non-circumvention clause, the complaint mechanism and the reinforced powers of the monitoring trustee, together with the penalty payments provided for in the Decision for non-compliance, provide sufficient safeguards against non-compliance with the Final Commitments.












(36)


The Commission concludes that the Final Commitments effectively address the preliminary competition concerns identified in its SO and PA. In reaching this conclusion, the Commission has taken into consideration the interests of third parties, including those of the interested third parties that have responded to the Market Test and considers that the Final Commitments will not hinder the legitimate commercial interests of any third party.












(37)


Amazon has not offered less onerous commitments in response to the SO and PA that also address the Commission’s preliminary concerns adequately. The Final Commitments accordingly comply with the principle of proportionality.












(38)


In light of the Final Commitments offered by Amazon, the Commission considers that there are no longer grounds for action on its part. The Decision shall apply for the following periods from the date of receipt of notification of the Decision:






—


5 years and 6 months for the data-silo commitment and the commitment relating to the non-discriminatory conditions and criteria for the purposes of identifying the Featured Offer displayed in the Buy Box as described in paragraphs 1 to 6 of the Final Commitments;










—


7 years and 6 months for the Prime-related commitments and the commitments concerning the Second Displayed Offer as described in paragraphs 7 to 24 of the Final Commitments.
















(39)


The Decision makes the commitments proposed by Amazon concerned legally binding upon it.






(1)  OJ L 1, 4.1.2003, p. 1. Regulation as amended by Regulation (EC) No 411/2004 (OJ L 68, 6.3.2004, p. 1).