Britain's top competition watchdog said Wednesday it had accepted proposals from Facebook parent Meta and Amazon to curb the use of data collected from their respective marketplaces for the benefit of their own products and bottom lines.

Both companies have been under investigation by the CMA as part of two separate inquiries, although the cases were similar in that both firms were using data to give them what the CMA considered to be "unfair advantage.".

The core of the antitrust case against Meta involved how it was using advertising data siphoned from Facebook to make decisions about content displays and product recommendations within Facebook Marketplace-the classifieds service it first rolled out in 2016. So in effect, Meta could use ad interaction data from Facebook to display items that are more relevant to users' feeds in Marketplace, which arguably improved consumers' experiences but harmed Facebook Marketplace competitors using Facebook and other Meta platforms to advertise their wares.

In June 2021, the CMA and EC separately but it would seem in concert with each other took steps to investigate Meta on this practice, with the CMA confirming last August that it was moving forward on a formal investigation, and the EC beginning its own investigation shortly thereafter.

But the CMA did indicate strongly in May that it would be willing to accept commitments from Meta to change its ways. This includes giving advertisers an opt-out in terms of preventing their advertising data from being used by Meta in Facebook Marketplace-something that Meta has said it will develop a "technical solution" for.

The final findings of the CMA state:

Meta will utilize technical measures that will prevent the use of certain competitor advertising data in the administration of Facebook Marketplace and design, development or enhancement of the product design, layout and/or functionality of Facebook Marketplace.

This technical measure shall cover only the advertisers who have opted out willingly from the usage of their advertising data, or have been automatically opted out by Meta and have not objected to such.

Most advertisers will still have to opt out of their advertising data being used, meaning that Meta will still be able to leverage a lot of advertising data, such is the power of defaults. However, certain companies will be automatically opted-out, those that compete directly with Facebook Marketplace, as identified by Meta itself. Those include Amazon, eBay, Etsy, Gumtree, Rightmove, Vinted and Zoopla.

Furthermore, Meta said that it would exercise "all reasonable endeavours" to prevent employees from using ad data in any product development wherein it could provide an upper hand over the advertisers using its platforms.

Worth mentioning here is that due to Meta's concessions and also due to acceptance by the CMA, no official ruling has been made yet about whether Meta has or hasn't breached any of the antitrust regulations. It is believed that this case in question is an example in which concessions offered at quite an early stage of the investigation prompted the CMA to shut down the case without letting it come to a proper conclusion.

These Commitments are without prejudice to Meta's position that it has not infringed UK competition law and that the initial concerns which led the CMA to initiate its Investigation are groundless, ",
the CMA said. "Nothing in these Commitments is or should be construed as an admission by Meta that its processing of advertiser data could infringe the Act (Competition Act 1998) or that Meta has a dominant position in any relevant market.".

And while Meta's commitments seem just that — commitments — the CMA has announced it will institute a monitoring trustee to keep an eye on whether or not it will be adhered to, including rollout and employee training under the new technical system.

Contemporaneous
Similarly, the CMA concurrent probe into Amazon on comparable marketplace data abuses is now closed as well. It did this well over a year since the watchdog first launched an investigation into whether the e-commerce titan was gaining an unfair advantage over third-party sellers by using their marketplace data to decide which products it would sell, how much stock to hold, and how much to charge for those products.

Also, the CMA was looking at whether Amazon was giving more preference to its own goods or those included in the FBA program in questions about being displayed in the "buy box.".

Data provided by Amazon to the CMA reveals that where the offers of both Amazon Retail and third-party seller[s] were eligible to be the Featured Offer on a product page in 2021, an offer by Amazon Retail was selected to be the Featured Offer in more than 80% of cases, the CMA said. "The CMA has received complaints from third-party sellers that the way the Featured Offer is selected discriminated in favor of Amazon-fulfilled offers, even in cases in which Amazon-fulfilled offers were not the most competitive in price."

Put simply, Amazon allegedly put its profits ahead of whatever might have been more beneficial for the customer, and as the owner of the platform, it put competing sellers at a disadvantage. And because of all this, Amazon began making moves this summer to appease the CMA with several commitments of its own, which the CMA has now accepted.

The CMA received a response from Amazon stating that it will not use "non-public" data that it holds on third-party sellers on Amazon's marketplace including anything related to payments of fulfilment services, for "decisions and decisional processes relating to retail operations by Amazon Retail that are in competition with third-party sellers."
This includes aggregated, individual and anonymized data.

As for the "buy box," Amazon said that will apply "objectively verifiable and non-discriminatory conditions and criteria for the purposes of determining the selection of the Featured Offer." It also said it won't use any Prime labeling as part of the "buy box" featured offer.

For one, the CMA also found that third-party sellers-which rely on courier services beyond Amazon's own fulfillment services or Royal Mail-could not individually negotiate for their Prime delivery services with the carriers that supplied those services-indeed, the third-party sellers would have to accept what Amazon agreed to with the carriers. In the future, Amazon said it will let third-party sellers negotiate their own rates with the carriers for Prime-eligible offers.

Just like Meta, the question of Amazon's compliance with its undertakings would rest on the CMA forming an "independent trustee" to manage the affair, which would undoubtedly come with its set of challenges — even if they were to get full unhindered cooperation from Amazon.

Concessions
This decision comes just weeks after the CMA secured some major concessions from Microsoft in order to finally approve its megabucks merger with Activision, but these new concessions are a little different, maybe even don't get to the essence of the problem. That is, as platform-owner and data-harnessers, Meta and Amazon still have too great an influence.

"We shouldn't underestimate how hard it is for regulators to extract concessions from the Big Tech firms and these concessions make sense," Tom Smith, a former CMA legal director now partner at London-based law firm Geradin Partners, told TechCrunch. "But neither of those cases touch the core business models of the firms. They are easy for the firms to live with and their compliance will be extremely hard to monitor.".

On the other side of the pond, meanwhile, the Federal Trade Commission and Department of Justice are ratcheting up their own antitrust cases against Amazon and Google, respectively. And although they're at a less advanced stage, they appear to be wider in scope: attorneys general from 17 states say Amazon has leveraged a "set of interlocking anticompetitive and unfair strategies" to create a powerful monopoly.

"The FTC's Amazon case and the DOJ's Google case are more ambitious in that regard," Smith continued.