Canada’s Competition Bureau has launched an investigation into online selling powerhouse Amazon.ca to examine whether the website’s U.S. owners are “impacting competition to the detriment of consumers and companies that do business in Canada.”
The competition watchdog said in a release Friday that while its probe is ongoing and stressed that “there is no conclusion of wrongdoing at this time,” the bureau is looking into whether or not the site may be engaging in anti-competitive practices, including:
- Any past or existing Amazon policies that 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.
- Any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.
While Amazon sells millions of items itself, it also acts as a conduit for sales of products from other businesses that Amazon doesn’t have in stock, in exchange for a cut of every sale in the process.
In a statement to CBC News, a spokesperson for Amazon said “we are co-operating with the Competition Bureau’s review and continue to work hard to support small and medium sized businesses who sell in our Canadian store — and help them grow.”
The bureau is asking any person or business that has conducted sales via Amazon.ca to contact them if they have any insights into the issues it is investigating. While personal information must be disclosed, the bureau is promising confidentiality.
Online sales booming
Online shopping has boomed during the the era of COVID-19, with Statistics Canada recently reporting that Canadians spent almost $4 billion at online retailers in May, double the amount they spent in February before the pandemic began, and more than double the amount they were spending online a year ago.
That figure does not include sales on Amazon.ca since the data agency does not consider Amazon to be a retailer because it does not have physical locations in Canada.
From Statistics Canada’s perspective, sales on Amazon.ca are recorded as wholesale sales.
Retail consultant Bruce Winder said in an interview that Amazon has become a target because it has grown so large, so fast, and that process has sped up during the pandemic.
“Amazon has come under the microscope for having just too much market power and [allegations] that they’re pushing around their suppliers,” he said.
Amazon likely uses its size and influence to exact certain terms the same way any large company would, but Winder says the company has an advantage because their data analytics about who is buying what from where and why are so much more precise.
“They have a lot more data, and they’re a lot more scientific about it because … everything they do goes on the web and it’s easier to track and easier to analyze,” he said.
The section of Canada’s Competition Act that the bureau is investigating deals with something known as “abuse of dominance” and if the bureau finds any evidence of it, it has the power to impose a penalty of $10 million for the first instance, followed by $15 million for any subsequent instances.