In a move to uphold fair competition, Amazon (NASDAQ:AMZN) and Meta have pledged to alter their advertising data practices following scrutiny from the UK's Competition and Markets Authority (CMA). The changes come after investigations into the companies' use of advertising customers' data raised concerns about the potential misuse of their dominant positions in online retail and social media respectively.
Amazon's investigation was initiated in July 2022 due to concerns over its potential misuse of its dominant UK online retail position. The company was suspected of favoring its own business and sellers using Amazon's warehousing and delivery services over other independent UK sellers on Amazon Marketplace. To address these concerns, Amazon has committed to ensuring that third-party sellers won't have their offers hidden and will have an equal chance of featuring in the 'Buy Box'. The company also pledged not to use third-party seller data for an unfair advantage.
Meta, on the other hand, has committed not to exploit its ad clients' data on Facebook (NASDAQ:META) Marketplace. The company will provide an opt-out for advertisers and limit ad data use in product creation.
The CMA concluded its scrutiny of Amazon Marketplace and Meta's advertising data practices today, receiving pledges from both corporations to uphold fair competition. In July, the CMA noted that Amazon's proposed alterations satisfactorily address competition concerns as per its preliminary view.
Sarah Cardell and Ann Pope from the CMA have welcomed this resolution. They expect more such resolutions with the implementation of the Digital Markets, Competition and Consumers Bill, which aims to support these sellers, including those using Prime delivery services, to compete fairly against Amazon’s retail arm.
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