European regulators have set their sights on Amazon, alleging the ecommerce giant is abusing its market power by using non-public business data of independent sellers to improve its own retail business.
The European Commission also announced today a separate formal antitrust investigation into Amazon’s ecommerce business, over the possible preferential treatment of Amazon’s own retail offers and those of third party sellers that use Amazon’s logistics services.
Amazon says it disagrees with the commission’s claims and represents only a small fraction of retail business.
The European Commission is already investigating Amazon for anti competitive behaviour regarding marketplace data, with preliminary inquiries dating back to 2018.
Executive Vice-President Margrethe Vestager (pictured above), in charge of the European Commission’s competition policy, today said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers.”
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Update: Amazon says it disagrees with the allegations and “will continue to make every effort to ensure it has an accurate understanding of the facts”.
“Amazon represents less than 1 per cent of the global retail market, and there are larger retailers in every country in which we operate,” a company spokesperson told Which-50. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
While Amazon may be a fraction of the overall global retail market it actually dominates Europe’s online retail market with 2019 online turnover of more that 32 billion euros, around four times as much as its nearest competitor, according to analysis by Dutch firm, Veraart Research.
Alleged abuse of a dominant market position
Brussels has formed a “preliminary view” that Amazon, in its role as a marketplace provider, is abusing its access to non-public business data like order volumes, sellers’ revenue, shipping data and guarantees.
The commission says it has evidence the data is available to Amazon employees and is fed into automated systems “which aggregate these data and use them to calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers”.
The information allows Amazon to optimise its own offerings and avoid the normal risks of retail competition in its biggest EU markets, France and Germany, according to the European Commission which has issued Amazon a Statement of Objections about the practice, a potential precursor to another formal investigation.
The commission also launched a second formal antitrust investigation into Amazon’s business practices which it suspects are favouring Amazon’s own offerings and those of sellers using Amazon’s order fulfilment services.
Specifically, it is alleged Amazon is favouring those sellers in its “Buy Box”, the prominent display allowing users to add sellers products directly into carts
“Winning the ‘Buy Box’ (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon’s marketplaces, and generates the vast majority of all sales,” the EU Commission statement says.
The commission will also investigate if marketplace sellers have effective access to Amazon’s Prime customers – those which pay a subscription for discounts and reduced shipping charges.
Vestager said the “conditions of competition” on the tech giant’s platform must be fair and not “artificially favour” either Amazon or sellers that also use Amazon’s additional logistics services.
“With ecommerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
EU antitrust investigations do not have a limited timeframe so can potentially go on for years.