EU hits Amazon with antitrust charges, opens new investigation

10 Nov 2020155 Views

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The European Commission has informed Amazon of its preliminary view that the company breached antitrust rules and has opened a second investigation into the e-commerce giant.

The European Commission has issued a Statement of Objections to Amazon based on the company’s use of marketplace seller data.

This followed an investigation, first opened in July 2019, that examined Amazon’s dual role as a platform providing an online marketplace for sellers to reach customers while also participating in this marketplace as a retailer in competition with third-party sellers.

‘We must ensure that dual-role platforms with market power, such as Amazon, do not distort competition’
– MARGRETHE VESTAGER

The Statement of Objections is a formal step in Commission investigations into suspected violations of antitrust rules. The parties concerned are informed in writing of the objections raised against them and can examine the investigation file, reply in writing, and request an oral hearing to present their comments before representatives of the Commission and national competition authorities.

In Amazon’s case, the investigation found that the company’s access to non-public business data from independent sellers on its marketplace can benefit its own retail business.

As a marketplace, Amazon has access to information such as the number of product orders and shipments, sellers’ revenues on the marketplace, the number of visits to specific offer pages, shipping data, past performance and more.

According to the European Commission investigation, large quantities of this data is available to Amazon workers involved in the retail business and can therefore be used by Amazon’s retail arm to augment its own offerings and make strategic business decisions in competition with other marketplace sellers.

This, the European Commission said, allows Amazon to avoid the usual risks of retail competition and leverage its dominance as an online marketplace in France and Germany, Amazon’s largest markets in the EU.

Second investigation opened

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The Commission has also opened a second formal antitrust investigation into Amazon’s e-commerce business practices. This investigation will examine the possible preferential treatment of Amazon’s own retail offers and offerings from third-party sellers that use its logistics and delivery services.

The Commission has assured that neither the sending of a Statement of Objections nor the opening of an investigation should be taken as a prejudgement on the outcome of an investigation. However, if these claims are confirmed, Amazon would be in breach of Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of a dominant position.

The second in-depth investigation will be carried out as a matter of priority, though no definitive timeline has been offered.

This investigation will cover the European Economic Area with the exception of Italy, where the national competition authority is already investigating similar concerns. The European Commission will continue to cooperate with the Italian Competition Authority throughout the investigation.

“We must ensure that dual-role platforms with market power, such as Amazon, do not distort competition,” said commission executive vice-president Margrethe Vestager.

“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. The conditions of competition on the Amazon platform must also be fair.

“Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”

Elaine Burke is the editor of Siliconrepublic.com

editorial@siliconrepublic.com