Government scrutiny intensifies: While the company navigates a difficult economic landscape, its business practices have come under fire from lawmakers in Europe and the US.
- In a major shift, Amazon reached a settlement with EU regulators that would see the company expand access to its buy box, stop using merchant data for its own retail business, and allow sellers to use third-party solutions for Prime fulfillment—but only in the region.
- The retailer is facing an antitrust challenge from California’s attorney general that accuses the company of using its market power to penalize merchants who try to list their products at lower prices on competitors’ sites.
- Regulators are also taking a closer look at how counterfeiters and other bad actors use marketplaces like Amazon to hawk stolen or fraudulent goods, which could lead to stricter oversight and more severe penalties for infractions.
The big takeaway: Despite the headwinds buffeting the company, Amazon is more optimistic than most about the broader economic landscape. According to an internal analysis reported on by Insider, the retailer’s economists believe there’s just a 30% chance of the US entering a recession within the next six months. But given that Amazon’s current situation is partly a function of its inability to predict that ecommerce demand would slow once COVID-19 restrictions were lifted, it makes sense that the company is preparing itself for the worst.
- Still, while Amazon’s renewed focus on containing costs is a necessary corrective from its prior freewheeling approach to spending, there is always the risk that excessive penny-pinching could hurt the company’s ability to continue innovating.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.