Amazon’s big EU antitrust concession may not be a concession

Amazon this week agreed to make a series of changes to its shopping sites and business practices in Europe, thus avoiding huge multi-billion dollar fines. sites, and logistics companies that compete with tech giants.

The deal marks the first time in Amazon’s history that it has made a series of changes as a result of a government investigation, and could serve as a blueprint for a deal that U.S. regulators can push over concerns of anti-competitive conduct. .

But at least one of the major changes envisioned by EU antitrust authorities as a concession for Amazon has already been under consideration internally for years, according to two sources familiar with the initiative. Another change Amazon has agreed to make in Europe — to stop using certain data it collects about sellers in third-party marketplaces — is that this data isn’t particularly useful, so it’s actually a change to the company. It’s a non-impacting change, sources told Recode.

So while Amazon’s deal looks like a win for regulators, it may contain changes that Amazon could readily accept as it would have no material impact on its competitiveness.

“Amazon’s strategy seems to have been to make it look like they’re giving up on something they’re perfectly comfortable giving up,” said one of the sources.

Amazon should have these and other agreed-upon changes in place by the summer. This applies to shopping sites across the EU, with the exception of Italy, where governments are under their own investigations into the tech giant.

Spokespeople for Amazon and the European Union’s Antitrust Commission didn’t respond to requests for comment.

In the first example, the modification in question concerns Amazon’s “Buy Box”, the section of the shopping site that displays the price and delivery date of a particular product, as well as the “Add to Cart” and “Buy Now” buttons. I’m here. When multiple parties are selling the same item, Amazon’s algorithm chooses which company “wins” the shopping cart box and wins the sale. Under a deal with the EU, Amazon has agreed to start displaying two shopping boxes for him on European sites if there is a second competing offer with significantly different prices and/or shipping speeds. This means that third-party sellers have an increased chance of getting ahead of shoppers when competing with Amazon to sell the same products.

But multiple sources say similar ideas were already being discussed inside Amazon, starting at least in 2018, before a major antitrust investigation into the company. If it means getting the item at a lower price, show shoppers multiple shopping cart box offers to give the customer more options, such as the option to wait longer for the item. was intended. After that, the idea of ​​offering multiple shopping his cart boxes could turn into an olive branch for sellers who, internally and publicly, complained about how difficult it was to win his top placements. was considered to be

“Amazon ‘conceding’ and offering multiple offers is something they probably would have done anyway,” said a former Amazon manager familiar with the initiative.

The EU says it can request a change in presentation if the second shopping cart box offering does not attract “sufficient consumer attention”.

The EU Agreement also prohibits Amazon from “using non-public data related to or derived from the activities of independent sellers in the marketplace for the purposes of its retail business.” This applies both to Amazon’s automated tools and to employees who make retail decisions by interacting with Amazon marketplace data. We consider the use of this data to be unfair, as it could help Amazon’s retail operations, which stock and sell the exact same products as our sellers, gain a competitive advantage over our sellers. was considered. This data can also be used by Amazon to clone popular products under their own brands.

Amazon already had a policy against employees or systems using non-public data from individual Amazon sellers, but that policy was occasionally breached, according to published reports. The new deal prohibits Amazon from using that data, but it also prohibits pooling or aggregating data from multiple merchants previously used by Amazon employees and systems. . can be used. However, according to sources, management has discussed internally that aggregated data would not be of particular value in any case.

“Aggregated data [product] The category is hot,” said the source. “You don’t need to look at private data for that.”

“That’s why people were abusing the system to use individual sellers’ data,” they added.

Regardless of whether the data is useful, Amazon has agreed not to use it for its own retail business or private label business, including brands such as Amazon Basics. Earlier this year, Recode said some Amazon executives were in favor of the idea of ​​exiting the private label business entirely if it meant avoiding tougher remedies in potential antitrust investigations. reported. However, Amazon is still running its business and the new EU deal will not directly affect its line of business.

The agreement also includes some changes related to the role Amazon Prime plays for the company. First, sellers can qualify for the Prime badge without using Amazon’s warehousing and delivery service known as Fulfillment by Amazon. Another agreement prohibits Amazon from using information collected through Prime regarding the performance or rates of third-party logistics providers to benefit Amazon’s logistics and delivery operations.

Agreement to change lasts for 5 to 7 years. But whether it will result in a more competitive experience for merchants, large and small, who sell on and compete with Amazon is an open question.