The two technology giants have pledged to stop practices that give them an “unfair” competitive advantage over customers and rivals.
The UK’s Competition and Markets Authority (CMA) has agreed to close two investigations into Amazon and Facebook parent Meta after the two companies agreed to refrain from using third-party data to their advantage.
The watchdog had been carrying out the two probes separately, but they bore striking similarities.
Amazon began being investigated by the CMA in July 2022 after the watchdog expressed concerns over the company’s data practices. The CMA claimed Amazon could be stifling competition and hurting consumers by giving preference to merchants paying for extras such as storage, packaging and delivery.
However, the company has now agreed to stop using data from third-party sellers to gain a competitive advantage, and pledged to allow sellers to negotiate their own delivery rates with independent delivery services and provide them with a fair shot at gaining access to the Buy Box, which allows customers to add a product to the basket or ‘save it for later’.
Amazon welcomed the deal, saying: “We have engaged constructively with the CMA and we welcome this resolution, which will preserve our ability to serve both our customers and the over 100,000 small- and medium-sized businesses selling through our UK store.”
The CMA’s investigation into Meta was opened a year before Amazon’s. It stemmed from concerns regarding the company’s use of advertising data funnelled from Facebook to inform decisions around content displays and product recommendations in Facebook Marketplace.
This practice was considered detrimental to Facebook Marketplace competitors that use Facebook and other Meta platforms to advertise their products.
In May, Meta signalled its disposition to address these concerns. Now the company has agreed to allow Facebook Marketplace competitors that use Meta’s platforms to advertise their products and services to opt out of certain parts of their ad data being used by Meta.
Meta has also pledged to limit how it uses ad data when developing its products.
“Meta will implement technical systems to prevent the use of certain competitor advertising data in the operation of Facebook Marketplace and the development and/or improvement of the product design, layout and/or functionality of Facebook Marketplace,” the CMA said.
Although most advertisers will have to opt out themselves, Meta has said it will automatically opt out direct competitors of Facebook Marketplace including Amazon, eBay, Etsy, Gumtree, Rightmove, Vinted and Zoopla.
The agreement, however, does not entail an assumption that Meta had infringed UK competition law.
A Meta spokesperson said: “We welcome the CMA’s decision to close its investigation into Marketplace on the basis of the commitments offered by Meta to put in place systems and controls designed to confirm and validate that advertiser data from competitors is not used in Marketplace.”
The European Commission is also currently leading a parallel investigation into both companies due to similar concerns.
