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Investing.com -- The UK’s Groceries Code Adjudicator (GCA) launched an investigation into Amazon.com Inc (NASDAQ:AMZN) on Friday, examining potential payment delays to suppliers.
The investigation will focus on whether Amazon breached paragraph 5 of the Groceries Code, which prohibits delays in payments, during the period from March 1, 2022, to June 20, 2025.
The GCA stated it has "reasonable grounds" for suspicion based on evidence from multiple sources.
Adjudicator Mark White emphasized the potential harm to suppliers from payment delays, noting: "The alleged delays could expose Amazon suppliers to excessive risk and unexpected costs, potentially affecting their ability to invest and innovate."
The probe will examine Amazon’s goods receipt and payment processes, how the company manages supplier concerns about payment deductions, and its use of deduction settlements in commercial negotiations with suppliers.
While the investigation covers Amazon’s entire designation period starting March 2022, it will concentrate on practices since January 1, 2024, to understand Amazon’s current payment procedures.
The GCA had previously engaged with Amazon earlier in 2024, instructing the e-commerce giant to take "swift and comprehensive action" to comply with the Code after receiving supplier complaints.
The watchdog continued monitoring Amazon and gathered additional evidence before determining an investigation was necessary.
Beyond payment delays, the GCA has received information about other potential Groceries Code issues at Amazon. The regulator stated it is maintaining ongoing engagement with the company on these matters and "will not hesitate" to launch further investigations if needed.
The GCA has called for Amazon’s direct suppliers and other stakeholders to provide evidence about their experiences with the company as part of the investigation process, assuring all responses will remain confidential.