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Competition Bureau investigating Amazon's practices in Canada

Shruti Shekar
·Telecom & Tech Reporter
·3 min read
Las Vegas,Nevada, United States - June 18, 2020: Amazon fulfillment center exterior shot in North Las Vegas Nevada USA . Amazon is the most famous on-line shopping company in the world.
GETTY

Canada’s Competition Bureau is investigating Amazon to determine if the company is engaging in anti-competitive practices through its Canadian marketplace, Amazon.ca.

The investigation is ongoing and no conclusion has been made, a press release said, but the bureau is inviting “market participants to provide input to inform its civil investigation.”

Areas of interest as part of the investigation include:

  • any past or existing Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels, such as their own websites or other online marketplaces;

  • the ability of third-party sellers to succeed on Amazon’s marketplace without using its “Fulfilment By Amazon” service or advertising on Amazon.ca; and

  • any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.

Michael LeBlanc, host of the The Voice of Retail podcast, said it wasn’t irregular for regulators to look at retailers in terms of their size and market dominance.

He added that in the Amazon as an e-commerce platform in the U.S. has a market share between 30 and 50 per cent. Those figures are not available in Canada.

“There’s a lot of speculation on their side. They are certainly a big player, they opened a second warehouse in Ottawa, so we know they’re a significant player but we don’t know. So the question then becomes what is the Competition Bureau looking at, and that is when you need to understand the marketplace,” he said.

LeBlanc also noted that in Amazon’s most recent earnings, the company indicated that 70 per cent of its products sold were from third-party retailers.

LeBlanc is a senior advisor at the Retail Council of Canada but emphasized that his comments do not represent the RCC as in this scenario it would not have an opinion.

Ariel Katz, an associate professor of law at the University of Toronto, said that the investigation appears to be based on Amazon’s alleged anti-competitive practices in other countries.

“If [the bureau] chooses to take any action, that’s what they will have to prove,” Katz said. “They would have to define the market and establish that Amazon is a dominant firm in that market and that certain activities have the potential to substantially lessen competition.”

While Amazon is a distributor for many third-party retailers, it also sells its own products.

“On the one hand they have a vertical relationship, [third-party retailers] use Amazon as a distributor, but it could also be a competitive relationship because Amazon is selling its own products,” Katz said.

The online retail giant is also facing a similar antitrust investigation in the EU. The EU's investigation is on whether Amazon selling its own products on the platform gives it an unfair competitive advantage over third-party retailers.

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