The UK regulatory watchdog Competition and Markets Authority (CMA) has accepted a series of commitments from two major tech corporations — Amazon.Com, Inc. AMZN and Meta Platforms, Inc. META — as a result of separate investigations.
The development will help protect fair competition on retail platforms Amazon Marketplace and Facebook Marketplace.
Meta has signed commitments with the regulatory watchdog, which will prevent the company from exploiting its advertising customers' data, meaning businesses and, ultimately, consumers are protected.
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Meta also committed to granting advertisers greater control over their advertisement data and promised to curtail its use of this information in product development.
Consequently, according to the commitment, Meta is prohibited from utilizing advertisers' data in a manner that would provide it with a competitive edge over the products or services offered by those advertisers. Without these measures, Meta risked having an unfair competitive advantage that could distort competition.
In the future, competitors of Facebook Marketplace that advertise on Meta platforms can opt out of their data being used to improve Facebook Marketplace.
"The commitments secured from Meta mean the firm cannot exploit advertising customers' data to give itself an unfair advantage – and as such distort competition," said Ann Pope, senior director for antitrust enforcement at the CMA.
"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. We also welcome the CMA's confirmation that it found no concerns with respect to the use of advertising data in Facebook Dating," a Meta company spokesperson told The Wall Street Journal.
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Regarding the Amazon marketplace, commitments secured by the CMA from Amazon will help ensure that third-party marketplace sellers can compete on a level playing field and that UK customers can access the best deals.
Most purchases on Amazon, encompassing items ranging from cookware to beauty products, occur via the "Buy Box" feature.
By ensuring that independent vendors on marketplace have an equitable opportunity for their deals to be showcased in this "Buy Box," Amazon aims to guarantee that consumers have access to compelling offers on various products.
Following its July 2022 probe into Amazon's potential misuse of its dominant position in the U.K.'s online retail market, the CMA has been addressing concerns that Amazon may be unfairly favoring its retail arm and logistics services over marketplace sellers and alternative delivery operators. In July 2023, the CMA sought feedback on Amazon's proposed concessions during this inquiry.
Amazon is set to be restricted from leveraging third-party seller data from its marketplace to gain a competitive edge. Additionally, sellers will have the liberty to set their own delivery rates by negotiating directly with independent Prime delivery service providers. An independent trustee, approved by the CMA, will oversee adherence to these commitments.
Price Action: META shares closed higher by 1.2% to $314.60 on Friday; shares were up by 0.12% to $314.99 after hours. AMZN shares closed higher by 0.38% to $138.60 on Friday; shares fell by 0.13% to $138.42 after hours.
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