Amazon and Microsoft face anti-competition investigations in UK

Tech giants Amazon and Microsoft are both facing investigations from the British competition watchdog over anti-competitive practices, it was revealed today. The Competition and Markets Authority has opened an investigation into claims that Amazon favors its own products and services in its marketplace, and will conduct a separate investigation into the $68.7 billion acquisition of games company Blizzard

Amazon and Microsoft are both under scrutiny by the UK competition authority (Photo by stockcam/iStock)

Amazon is facing a similar research in Europe, although reports today suggest it has struck a deal with the European Commission to allay its concerns about anti-competitive practices. The Microsoft-Blizzard deal is already under review in the US.

UK CMA has competition concerns with Amazon

The Amazon research will look at products sold on Amazon’s marketplacethat are supplied through its own retailers and third-party sellers.

Amazon provides services to these sellers, advertises products, and offers delivery and packaging options through its Fulfillment by Amazon service. The CMA investigation will examine whether Amazon has a dominant position in the UK and whether it is abusing that position by favoring its own retailers or sellers who use its services over other third-party sellers in the market.

The investigation will look at how Amazon collects and uses third-party seller data, including whether this gives the company an unfair advantage over business decisions made by its retail arm. It will also explore how it sets criteria for products to hit the ‘Koopbox’ promotion area, as well as how it chooses which products are used in its enhanced Prime delivery service.

“Thousands of British companies use Amazon to sell their products and it is important that they can operate in a competitive market,” said Sarah Cardell, general counsel at the CMA. “Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items or having less choice. A formal investigation will allow us to properly investigate this matter.”

The CMA says it will try to contact the European Commission, which has opened two similar investigations into Amazon’s behavior. however, the FT reported this morning that Amazon has struck a deal with the Commission, causing it to share more data with third parties in an effort to allay concerns. This would need to be approved by some of Amazon’s competitors before shutting down the investigation, the report said.

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The first phase of the British investigation will run until September.

Microsoft’s Blizzard deal could lead to an anti-competition investigation in the UK

Separately, the CMA is considering whether to launch an in-depth investigation into Microsoft’s proposed acquisition of Blizzard, which was announced earlier this year.

It said it “considers whether it is or could be that this transaction, if executed, will lead to the creation of a relevant merger situation under the merger provisions of the Companies Act 2002 and, if so, whether the creation of that situation can be expected.” that this will lead to a significant reduction in competition within a UK market or markets for goods or services.”

The CMA has until September 1 to decide whether to launch a Phase 1 investigation under the law. This would be the first step to potentially blocking the deal.

Microsoft is already preparing to face regulators in the US, where the FTC is investigating the takeoverwhile the European Commission and China are both expected to take similar measures.

Read more: Self-Preference For Big Tech – Is It Good For Business?

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