Amazon Amends Seller Data Usage Policy, Avoids $47B EU Fine

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Amazon Amends Seller Data Usage Policy, Avoids $47B EU Fine
Amazon Amends Seller Data Usage Policy, Avoids $47B EU Fine

Amazon is making significant changes to its business to address concerns surrounding its use of third-party seller data for its benefit, The European Commission announced Tuesday.

The company’s commitment to change its data usage policy follows a series of investigations into its business practices, including its systematic use of non-public business data of independent sellers to get the upper hand in sales of its own retail products. The company was also being investigated for giving preferential treatment to sellers using its delivery service and featuring products from certain sellers in its “Buy Box,” which typically drives higher conversion rates and revenue.

Following the investigations, the company was on the hook for a potential fine of up to 10% of its global annual revenues, which would have amounted to a maximum of $47 billion.

“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,” EU’s competition chief Margrethe Vestager said.

"With these new rules, competing independent retailers, carriers and European customers will have more opportunities and choices."

As part of the resolution, Amazon has promised to stop making some data regarding third-party sellers available to its employees or automated tools. The company will also stop giving preferential treatment to sellers using its delivery service by enabling them to choose any carrier for their logistics and delivery freely. And finally, the company will treat sellers equally when ranking offers in the Buy Box and introduce another Buy Box on its product pages, featuring a “second offer from a different seller that is sufficiently differentiated from the first one on price and/or delivery.”

While Amazon has agreed to make changes to its business practices, it still disagrees with many of the findings that came out of the investigations.

“While we continue to disagree with several of the preliminary conclusions the European Commission made, we have engaged constructively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium-sized businesses selling through our stores,” an Amazon spokesperson told CNBC.

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