software amazon reportedly settles lingering antitrust probes with eu
Software

Amazon Reportedly Settles Lingering Antitrust Probes With EU

Amazon DMA agreement
Image by Tumisu from Pixabay

The Financial Times is reporting that Amazon has all but agreed to terms with the EU over a long-standing antitrust probe into the company’s commercial practices. At issue were the methods Amazon uses to give preference to its own products and the lifting of restrictions on third-party logistics firms.

Prime sellers will be able to select their own logistics options

Under the terms of the deal, which is currently scheduled to be unveiled on 20th December, Amazon has committed to increasing the visibility of rival products to its own. The company will also let Prime sellers choose any shipping company they want and negotiate fees directly, instead of being locked into Amazon’s own services.

The agreement comes some three years after the EU opened a probe into some of the anti-competitive terms Amazon forced on its business users. According to the FT, this will be the first major public test of its Digital Markets Act, designed to reign in the big tech firms and level the playing field.

Chris Meyers, Amazon’s associate general counsel, reportedly told a conference on Monday that the company’s compliance reflected how the group planned to meet the requirements of the new legislation from Brussels:

The specific commitment that we have proposed, and which we think also meets the obligations of the DMA, is really the approach we are going to take under the DMA.

The DMA came into force on 1st November, but will only move into the full implementation phase from 2nd May 2023. From that point, large companies, which the EU considers to be ‘gatekeepers’ of massive commerce platforms, will have to adhere to new rules. These rules will ensure that small companies have an equal chance to benefit from the platforms and services.

Gatekeepers are defined as those who ‘have a strong economic position’, are active in multiple EU countries, and connect a lot of users to many businesses. They also qualify if they have an entrenched position in the market, lasting over three years previously.

Amazon As A Gatekeeper

These gatekeepers don’t only include pure e-commerce platforms like Amazon, but also digital ecosystems like app stores. Both Android and Apple’s iOS qualify, as does Facebook. The European regulators have made no secret of the fact they consider these companies to be prime targets for anti-competitive action in the European market.

This approach is bolstered by the fact the giant tech companies are very adept at minimizing their tax burden in their operating countries, often at the detriment of the host markets. This gaming of the tax system is one factor that has spurred a significant amount of debate in the EU and UK over the past few years.

Similar US legislation is still being debated

The US has similarly been looking at taking action to curb the potential anti-trust activities of big tech. However, while the EU legislation is already launching into action, the two main pieces of legislation in the US, the Choice Online Act, and the Open App Markets Act, are still being debated.

Both approaches also have a number of significant differences, including the fact that there are currently many more defenses available to the big tech players in the US approaches.