As a result of Amazon’s increasing activity in the U.K. grocery sector, Britain’s Competition and Markets Authority (CMA) announced in Wednesday (Feb. 9) statement that it has designated the eCommerce giant and its U.K. subsidiaries under the Groceries Market Investigation Order.
Following this decision, Amazon will now have to comply with the industry rules protecting suppliers from unfair treatment from grocery retailers.
These rules, which apply to retailers with an annual turnover of more than 1 billion pounds ($1.35 billion) from grocery sales, vary from preventing companies from making changes to supply contracts at “short notice” to demanding that retailers give an “appropriate period of notice” as well as reasons for terminating a contract if they choose to no longer work with a supplier.
Adam Land, senior director, remedies, business and financial analysis at the CMA, said: “Households across the UK are increasingly using Amazon to buy food and other essential items. Today’s decision to designate Amazon helps to ensure a level playing field for companies active in the groceries sector as people’s buying habits evolve.”
Land added: “These rules mean that the thousands of companies supplying Amazon with groceries are now protected from potential unfair business practices. We’ll continue to keep a close eye on the sector to make sure all major grocery retailers are bound by the same rules.”
And from all indications, the regulator is continuing to keep a close eye on the eCommerce firm as this decision comes after the watchdog fined Amazon 55,000 pounds ($72,364) over its failure to provide documents into its purchase of Deliveroo on time back in 2020.
As PYMNTS reported at the time, Amazon purchased a 16% stake in the food delivery company during a $575 million fundraising round, but it took a long 16-month waiting period before the CMA finally approved the deal in August 2020.
Read more: UK Fines Amazon For Delaying Release Of Info In Deliveroo Investigation
According to the regulator, however, there were 189 documents, including multiple ones that were relevant to the Phase 2 Amazon/Deliveroo merger probe, that Amazon failed to produce on time for the first deadline.
The CMA found that although Amazon “did ultimately provide all of the information required,” there were 189 documents, including multiple ones that were relevant to the Phase 2 Amazon/Deliveroo merger probe, that Amazon failed to produce on time for the first deadline. This behavior, the watchdog said at the time, “caused unnecessary delays to the CMA’s investigation.”
See also: UK Regulators Extend Hold On Amazon/Deliveroo Deal
The approval of the merger took a year due to a CMA investigation over concerns that the deal could stifle competition and be disadvantageous for shoppers at the same time. The pandemic also influenced the delay, as the CMA struggled to deal with then-new “essential worker” designation as sign-ups for Deliveroo jumped 86% in March 2020 in the wake of the pandemic.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More