EU’s Vestager takes second shot at redesigning Amazon’s website

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The EU’s competition chief Margrethe Vestager is taking a second shot at forcing Amazon, the world’s biggest retailer, to redesign its website in a way that’s fairer for small vendors, after her first settlement deal in July flopped.

The European Commission’s antitrust police are locked in a long-running battle with Amazon over how to rejig the website in a manner that ensures smaller vendors can compete fairly with products directly sold by the e-commerce giant itself.

The competition problem Vestager is trying to crack is whether Amazon is abusing its ubiquitous presence as a platform to give undue prominence in web displays to its own goods — or those sold by companies with special arrangements with Amazon — to the detriment of independent rivals. The Danish enforcer is probing how the company uses non-public data to design products that compete with those of sellers. She also studying whether there is unfair self-preferencing in how Amazon features sellers in its ‘Add to Cart’ feature, otherwise known as the ‘Buy Box’ button.

A first attempt to close the Commission’s twin investigations into Amazon’s practices failed in July when a settlement offer was slammed by campaigners as “vague and full of loopholes.” Vestager told POLITICO last month that there had been “room for improvement” in the initial deal it struck with the U.S. tech giant.

Now she’s having a second go. Last week, Brussels circulated a revised settlement offer to market rivals and customers, according to two people who spoke to POLITICO on condition of anonymity because the process is shrouded in confidentiality.

The fundamental logic of the improvements suggested in this second attempt is to ensure users of Amazon can find products from third-party sellers more easily, rather than having to scroll further down the page to find a deal they’d like to snap up. This will include a secondary Buy Box that will be presented more prominently, and without wording that may turn shoppers off. A classic example of such negative wording is an offer marked with “Willing to wait?” which would be a way to deter buyers.

It now remains to be seen whether Amazon’s rivals and civil society groups will be impressed by this second attempt at a website rejig by Vestager and Amazon.

This is Brussels’ most advanced Big Tech probe and has been on the desks of EU competition enforcers since 2020, when the Commission issued a charge sheet against Amazon for using non-public data garnered from third-party sales on its platform — such as items selling well — to start designing its own products and competing directly with vendors.

At the same time, officials also launched a probe into Amazon’s Buy Box, which has also been subject to a record €1.13 billion fine for similar concerns from the Italian competition authority last year.

Vestager previously faced off against Amazon as part of a high-profile case in which Brussels took aim at the company’s tax benefits in Luxembourg, characterizing them as a form of illegal state aid. The EU courts however struck out the Vestager’s findings, pouring criticism over the Commission’s analysis.

A settlement deal between the Commission and Amazon this time around would help Vestager avoid a potentially bruising legal battle with one of the world’s most powerful organizations while also protecting Amazon from future damages claims for the practices being probed.

A Commission spokesperson said on Wednesday that it was currently “reviewing all comments by stakeholders with respect to the proposed commitments.” An Amazon spokesperson said it would continue to “engage constructively with the Commission to address their concerns.”

Source: Politico