Antitrust Law Daily Canada Competition watchdog scrutinizing Amazon’s business practices
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Friday, August 14, 2020

Canada Competition watchdog scrutinizing Amazon’s business practices

By Linda O’Brien, J.D., LL.M.

The Canada Competition Bureau is seeking input from Canadian businesses that have used Amazon to sell products online on whether Amazon is impacting competition.

The Canadian competition authority is investigating whether Amazon on its Canadian marketplace, Amazon.ca, is engaging in conduct that impacts competition "to the detriment of consumers and companies that do business in Canada." As part of its ongoing investigation, the Canada Competition Bureau has asked sellers and businesses that offer their products online to provide input into conduct by Amazon. The Bureau, in a news release, stated that while "there is no conclusion of wrongdoing at this time," the agency is looking into whether the site may be engaging in anticompetitive practices.

The investigation is being conducted under the restrictive trade practices provisions of the Competition Act, with a focus on potential abuse of dominance. Areas of interest in the ongoing investigation include: any past or existing Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels, such as their own websites or other online marketplaces; the ability of third-party sellers to succeed on Amazon’s marketplace without using its "Fulfilment By Amazon" service or advertising on Amazon.ca; and any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.

The Bureau noted that an increasing number of Canadians are shopping online. In 2018 alone, Canadians spent $57.4 billion on online purchases, compared to only $18.9 billion in 2012.

U.S. congressional scrutiny. Amazon is also under the microscope in the United States. The House Judiciary Committee has recently wrapped up hearings in an antitrust investigation into the tech sector, including Amazon’s business practices with third-party sellers. In July, Amazon CEO Jeff Bezos, along with the CEOs of Apple, Google, and Facebook, appeared before the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law to deliver prepared remarks and answer questions on a wide range of topics, including antitrust, acquisitions and mergers, privacy, presidential elections and free speech, and consumer protection.

In July 2019, the Department of Justice Antitrust Division announced that it was reviewing whether major online platforms, have achieved market power and, if so, whether they are "engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers." While the government did not identify the targets of the investigation by name, Amazon is under scrutiny.

EC investigation. The European Commission (EC) also in July 2019 opened a formal antitrust investigation to assess whether Amazon's use of sensitive data from independent retailers who sell on its marketplace is in breach of European Union competition rules. As part of its in-depth investigation, the EC examined the standard agreements between Amazon and marketplace sellers as well as the role of data in the selection of sellers for the "Buy Box" which allows customers to add items from a specific retailer directly to their shopping carts.

Digital economy summit. In related tech news, the Canada Competition Bureau will be hosting its first Digital Enforcement Summit on new and emerging issues in the digital economy. The summit will bring together participants from international competition authorities and federal regulators, as well as from the business, legal and academic communities. In a series of four online panels throughout October and November 2020, the summit will allow the Bureau and its international counterparts to share best practices and explore new tools and strategies for tackling emerging enforcement issues in the digital era.

Companies: Amazon Inc.

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