Online retail giant Amazon has reached an agreement with the European Commission to close two inquiries into anti-competitive tactics, notably using third-party seller data to improve its own sales.
EU vice-president Margrethe Vestager announced Amazon's commitments and hailed them as a victory for smaller retailers selling products on Amazon's online marketplace.
Amazon will make major changes to its business practices to end competition probes in Europe by giving customers more visible choices when buying products and, for Prime members, more delivery options, said European Union regulators.
Amazon, and its software, will be forbidden from analysing non-public third-party seller data, and will treat all sellers equally when deciding which offer to put in the best screen location.
Sellers will also be allowed to choose their own delivery firm, rather than being obliged to use the service chosen by Amazon's "Prime" premium service.
"And this means that by next summer. Amazon will have to end any preferential treatment towards its own retail and logistics operations in Europe," Vestager told reporters.
"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 his platform," she said.
"With these new rules competing independent retailers, carriers and European customers, well, they will have more opportunity and more choice."
An Amazon spokesperson said, "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," the spokesperson said.
Vestager's investigators were concerned that Amazon was tracking sales by private retailers using its platform to identify lucrative markets and target its own offers.
The agreement only applies to Amazon's business practices in Europe and will last for seven years, though some portions of the deal will end in five years. Amazon will have to make the changes by June.
Amazon had offered concessions in July to resolve the two investigations. It improved those initial proposals after the commission tested them out and received feedback from consumer groups, delivery companies, book publishers and academics.
As part of the deal, Amazon is also easing access for merchants and couriers to its Prime membership service. It will stop discriminating against Prime sellers that don't use its own logistics and delivery services and will let Prime members freely choose any delivery service. Currently, couriers can only deliver Prime parcels if they're approved by Amazon.
The company also pledged to stop using "non-public data" from independent sellers on its platform to provide insights on how to compete against those merchants through its own sales of branded goods or "private label" products.
"They will have to take the same risks as everyone else on the platform because they cannot rely on everyone else's data," Vestager said.
Amazon uses the data to decide what kind of products to launch, prices, which suppliers to choose, or how to manage inventories, Vestager said. She said the company has committed to stop doing this with seller data, including sales, revenues, shipments, transaction prices, performance, and consumer visits.
Monique Goyens, the director general of European consumer group BEUC, said the settlement allows consumers greater choice when they shop on Amazon.
"That said, consumers will only feel the benefits of these remedies if the Commission ensures that they are applied in practice," Goyens said, adding regulators should "closely monitor" Amazon's compliance with its commitments and insist on improvements if necessary.
Amazon faces similar scrutiny in the U.S. and Britain.
In September, California Attorney General Rob Bonta's office sued Amazon, accusing the company of stifling competition and increasing prices for products across the market. His office said Amazon effectively barred third-party sellers and wholesale suppliers from offering lower prices elsewhere through contract terms that harmed the ability of other businesses to compete.
The company says it considers an item competitively priced when it's offered at or below a price displayed by other retailers, which can spur higher prices elsewhere. Some vendors who pay more to sell on Amazon could lower their prices on other sites, but they don't do so out of fear they will lose valuable Amazon real estate or face suspensions, the lawsuit said.
California is accusing Amazon of violating the state's antitrust and unfair competition laws. Lawmakers on Capitol Hill have been pushing bipartisan antitrust legislation aiming to rein in Big Tech companies, but hopes for the bill have dimmed amid intense pushback from the tech industry.
(With inputs from AP and AFP)