Remarks by Executive Vice-President Vestager on the decision to make binding commitments offered by Amazon

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.