As part of the probe, the antitrust watchdog will assess whether the online retailer is using its dominant position to manipulate the market and give an unfair advantage to its own retail business or sellers that use its services.
The inquiry will examine how Amazon collects and uses third-party seller data, as well as its eligibility criteria for selling products under its Prime label, which guarantees free and faster shipping.
In addition, the CMA will scrutinise how the retailer selects the preferred choice in its ‘Buy Box’, which is displayed prominently on the retailer’s product pages.
The box gives customers options to ‘Buy Now’ with one click or ‘Add to Basket’ from a specific seller.
CMA general counsel Sarah Cardell said: “Millions of people across the UK rely on Amazon’s services for fast delivery of all types of products at the click of a button.
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“This is an important area so it’s right that we carefully investigate whether Amazon is using third-party data to give an unfair boost to its own retail business and whether it favours sellers who use its logistics and delivery services – both of which could weaken competition.
“Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market.
“Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower-quality items or having less choice.”
The investigation comes after the European Commission launched two investigations into similar claims against Amazon.
The CMA is also currently investigating Amazon and Google over concerns about the actions they have taken to address counterfeit reviews on their websites.