EU Competition Commissioner Margrethe Vestager confirmed that they are doing a preliminary antitrust investigation into Amazon’s business practices on Wednesday. This development was revealed during a press conference hosted to discuss the decision taken on Luxemburg McDonald’s state aid case.
Vestager clarified that it is not yet a formal investigation, but the committee is asking questions about how Amazon is using its data. Nevertheless, they have begun probing around, seeking answers to whether Amazon data, collected for legitimate purposes, is also used to give Amazon a competitive advantage over the smaller merchants.
The issue, says Vestager, is whether Amazon is using data from the merchants it hosts on its site to secure an advantage in selling products against those same retailers. The regulators want to know whether that data could give Amazon an edge over competitors by providing insight into consumer behavior.
“Well, do you then also use this data to do your own calculations? As to what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things? And that has made us start a preliminary… antitrust investigation into Amazon’s business practices.”
She added that EU regulators have started gathering information on the issue and have sent “quite a number of questionnaires” to merchants and others in order to understand the issue better.
Amazon has all the right to fear this investigation. Vestager has the power to fine companies up to 10 percent of their global turnover for breaching EU antitrust rules. Earlier this year, in July, EU had slapped Google with a $5 billion fine for the Android anticompetitive practices.
Investors and insiders have been looking for ways to break the company up for a long time. President Donald Trump had also hinted at antitrust action against Amazon, in July.
Amazon is yet to comment on this development.
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