In a significant escalation that signals growing scrutiny of tech giants operating in Canada, the Competition Bureau announced yesterday it has advanced its investigation into Amazon Canada’s business practices, focusing on potential market dominance concerns that may be stifling competition in the nation’s e-commerce sector.
The probe, which began as a preliminary assessment in 2023, has now entered a formal investigative phase after the Bureau uncovered what it described as “concerning patterns” in how Amazon operates its marketplace platform. Commissioner Matthew Boswell stated that the investigation will examine whether Amazon’s dual role as both platform operator and seller creates an unfair advantage that harms Canadian businesses and consumers.
“When a company controls both the marketplace and competes within it, we must ensure this power isn’t being leveraged to disadvantage other sellers,” Boswell explained during a press conference in Ottawa. “Our preliminary findings indicate Amazon may be using seller data to identify successful products and then launching competing offerings, often with preferential placement on the platform.”
The investigation comes as part of a broader international trend, with similar probes already underway in the European Union, United Kingdom, and United States. The Competition Bureau has requested thousands of documents from Amazon and is interviewing dozens of Canadian businesses that sell products through the platform.
Industry analysts suggest the timing aligns with Canada’s recent updates to competition legislation that provide regulators with enhanced enforcement tools. “This investigation represents the first major test of Canada’s modernized competition framework,” said Dr. Patricia Morin, competition policy expert at the University of Toronto. “The Bureau now has authority to impose administrative monetary penalties of up to 3% of a company’s global revenue for anti-competitive conduct.”
For its part, Amazon Canada has defended its business model in a statement, claiming it has “created unprecedented opportunities for Canadian entrepreneurs” and that the company faces “intense competition in every segment” in which it operates. Company spokesperson Michael Strauss noted that third-party sellers account for over 60% of all sales on Amazon.ca, generating billions in revenue for Canadian businesses.
However, the Retail Council of Canada has welcomed the investigation, citing complaints from numerous member businesses about Amazon’s practices. “Many retailers have reported being undercut by Amazon’s private label products shortly after their own products demonstrated success on the platform,” said Karen Mitchell, the Council’s vice president of government relations.
The Bureau’s investigation will focus on several key areas, including Amazon’s use of third-party seller data, its product search algorithms and how they may favor Amazon-branded items, and the potential tying of marketplace access to the use of Amazon’s fulfillment services.
Economic experts estimate Amazon controls approximately 45% of Canada’s e-commerce market, with annual revenues in Canada exceeding $12 billion, according to CO24 Business research. The Competition Bureau’s probe is expected to take 12-18 months, with potential remedies ranging from operational changes to significant financial penalties.
Small business advocates across Canada have expressed support for the investigation. The Canadian Federation of Independent Business reports that 78% of its members who sell through online marketplaces have experienced challenges with Amazon’s policies, particularly regarding product visibility and fee structures.
As digital markets continue to evolve rapidly, what standards should be applied to companies that both operate marketplaces and compete within them to ensure fair competition while still encouraging innovation?
