Law Questions Task - Assignment Solution

Part 1

Question 1

In this case the complainant is Costco who is using Amazon as its platform for on-line selling. Costco is a supplier in Amazon and has complained against Amazon upon its participation as a third party seller of office supplies on its own platform .Costco puts up his case implying that Amazon’s own participation in selling while being a platform owner for selling and buying can be a reason for conflict of interest. 

As an official at competition commission it is vital to ensure fairness and neutrality to promote fair competition. There are two aspects to this case one is that can a platform owner be a vendor/ supplier at the same time and compete with other sellers while being in charge of all the data base and being able to manipulate the data in its own favour. And if it can, then the other aspect is that what would be the circumstances under which the platform owner, viz. amazon, can do it.

The claimant puts up an argument that for a platform owner to compete is not fair and is putting risk to Costco. The claims of expected risk can be entertained on other levels but these suspicions cannot take rights from amazon for selling. To sell a product in itself whether being an owner of platform and competing with third party sellers is not wrong, many cases have come upon amazon and Google of similar nature but the right to sell is a legal right of the platform owner and cannot be taken. However, the major concern of this case should be that when Amazon sells then it sells with complete neutrality and on fair basis. The European Commission issued a remedy, after seven years of investigation for Google search case, which resembled the case similar to Costco vs. Amazon (in this hypothetical case study), that Google has to comply with same principals of giving completely equal treatment to other third party suppliers as it does to its own service and has to apply same process and methods for rivals as it does to display its own products. Thus amazon may be a totally justified seller on its own platform if there is no violation of competition policy and any unfair discrimination against the competing sellers as feared by Costco. Costco fears that it can lead to discrimination so the implications to redeem this fear  should not be to end the selling rights of amazon on its own platform but the implications should specifically stress upon the fact that there should be selling without any discrimination. The ‘equal treatment’ remedy placed by the European commission sums it all for Costco and Amazon. Equal rights ensures neutrality in platform selling, ensures fairness in competition and if transparency is added then the phenomenon of equal rights will be strengthened even more and remove all insecurities that the claimant has upon discrimination that Amazons competition may bring about. 

The other aspect to this fear is also that the defendant (Amazon) is known for price efficiency and the claimant merely fears that this edge may lead to fall in its sales. Several sellers in Amazon have confessed that Amazon provides them a big window to reach out to customer but it is tough for them to compete on Amazon as compared to on eBay as on Amazon the competition is with third party sellers and Amazon itself who charges a commission of 10-15% to its seller and then sells the same product at lower price with obviously having an advantage of not paying the commission.Thus this fear of complainant can be subjected to the fact that Amazon attains price efficiency usually as there is no commission that amazon would charge to itself and this gives them it an edge of on price cut, so to alleviate this it is necessary that amazon also goes the same method and procedure as the other sellers go through to avoid any unfair treatment. 

 Overall, in the light of this case, the decision that is reached as an official at competition commission is that upon Costco’s well placed reservations the rights to sell as a platform owner on its own platform may not be taken from Amazon. However, in order to ensure that there is completely free and fair selling and there is no risk of discrimination for Costco and for other seller of office supplies at Amazon there should be proper implications and regulation for platforms transparency and non-discrimination so that all parties have their rights practiced, dually, with freedom of selling and fairness in selling. 

Question 2

If it is considered that there is no principal legal implication that may bind Amazon from selling online. However, Amazon has access to data base of sellers with these circumstances it needs to be decided whether it is ethical for Amazon to operate as a seller. 

Under these circumstances Amazon may have access to several types of information which includes the sales data; analytics on the most popular products on what is best selling and all these reports that may help Amazon analyse in which business to invest in. James Dunford Wood stated that Amazon is placed in powerful position and can always take advantage of what to sell and analyse what not to sell. It is very natural that Amazon will always have an edge in knowledge and may put timely decisions and always stay ahead in competition. The knowledge efficiency is because Amazon has an access to Database of suppliers and Amazon might have had an access to the data base of office suppliers and may have sensed the opportunity of profits and hence invested in the business. This may not make it illegal for Amazon to operate as supplier, however, it may raise some serious concerns in ethics as to out beat Amazon in knowledge all suppliers may need the same kind of access. Now in such case to operate as a competitor may be a bit discriminatory as Amazon may have an edge on everything as they have the kind of database that gives them the knowledge of its competitors and how to out beat them while there is a certain knowledge gap in the market for either third party suppliers.