3 min read

Today European Commission has issued a formal antitrust investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.

Commissioner Margrethe Vestager, in charge of competition policy, said: “European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”

The Commission has noticed that Amazon while providing a marketplace for competitive sellers collects data about the activity on its platform. Based on the preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace.


As a part of its in-depth investigation the Commission will look into:

  • the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
  • the role of data in the selection of the winners of the “Buy Box” and the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.

If proven, the practices under investigation may breach the EU competition rules on anticompetitive agreements between the company under Article 101 of the Treaty on the Functioning of the European Union (TFEU). 

 

Article 101

Source: EU Commission

Commissioner Margrethe Vestager hinted for months that she wanted to escalate a preliminary inquiry into how Amazon may be unfairly using sales data to undercut smaller shops on its Marketplace platform. By ramping up the probe, officials can start to build a case that could ultimately lead to fines or an order to change the way the Seattle-based company operates in the EU.

“If powerful platforms are found to use data they amass to get an edge over their competitors, both consumers and the market bear the cost,” said Johannes Kleis of BEUC, the European consumer organization in Brussels.

The Commission has already informed Amazon about opening the case proceedings. It will open the investigations on priority basis and there is no legal deadline attached to put an end to this case.

The current Chief Economist at the EU Commission approached Sen Elizabeth Warren, who wants to break the big tech, to umpire and build a team to lead this case.

To know more about this news, you can check out the official EU Commission page.

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Being a Senior Content Marketing Editor at Packt Publishing, I handle vast array of content in the tech space ranging from Data science, Web development, Programming, Cloud & Networking, IoT, Security and Game development. With prior experience and understanding of Marketing I aspire to grow leaps and bounds in the Content & Digital Marketing field. On the personal front I am an ambivert and love to read inspiring articles and books on life and in general.