The U.K.’s Competition and Markets Authority (CMA) has accepted proposals from Meta (parent company of Facebook) and Amazon to address concerns over the use of data gathered from their respective marketplaces to give themselves an unfair advantage. The CMA had been investigating both companies separately, but the cases showed similarities in terms of the unfair use of data.
Key Takeaway
The U.K.’s CMA has reached settlements with Meta and Amazon to address concerns of unfair data practices. Meta has committed to implementing technical systems to prevent the use of certain competitor advertising data in Facebook Marketplace operations, while Amazon has pledged not to use “non-public” data on third-party sellers and to apply non-discriminatory conditions in selecting featured offers. Independent trustees will monitor their compliance with the commitments.
The Case against Meta
The CMA focused on Meta’s use of advertising data from Facebook to inform decision-making within Facebook Marketplace. By using ad interaction data, Meta could display more relevant items in users’ Marketplace feeds. While this may have been beneficial to consumers, it put competitors of Facebook Marketplace at a disadvantage.
To address these concerns, Meta has committed to implementing technical systems to prevent the use of certain competitor advertising data in Facebook Marketplace operations and product development. Advertisers will have the option to opt-out of their data being used, and Meta will make efforts to prevent employees working on product development from leveraging ad data to gain an advantage over advertisers.
The Case against Amazon
The CMA also investigated Amazon’s alleged unfair use of data from third-party marketplace sellers to make decisions about which products to sell, manage supply and demand, and set prices. Furthermore, concerns were raised that Amazon favored its own products or those in the Fulfilled by Amazon program in the prominent “buy box” section.
To address these concerns, Amazon has committed to not using “non-public” data related to third-party sellers for decisions that compete with these sellers. Amazon will also apply objective and non-discriminatory conditions in selecting the featured offer in the “buy box” and will not use Prime labeling as part of this selection process. Additionally, Amazon will allow third-party sellers to negotiate their own rates with carriers for Prime-eligible offers.
Monitoring and Compliance
To ensure compliance with their commitments, both Meta and Amazon will be monitored by independent trustees appointed by the CMA. These trustees will oversee the implementation of technical systems, employee training, and adherence to the agreed-upon measures.
While these settlements represent progress, critics argue that they do not address the core business models of Meta and Amazon and do not go far enough in regulating their power. Antitrust cases against these companies by the Federal Trade Commission and the Department of Justice in the U.S. are seen as more extensive in scope. Regulators continue to grapple with the challenges of monitoring and ensuring compliance from Big Tech firms.
