The European Commission formally accused Amazon of misusing the data of third-party merchants on its platform to gain a competitive advantage for its own products. The new antitrust case marks the latest salvo by European regulators against the growing might of U.S. tech companies.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” said EC executive vice president Margrethe Vestager in a statement. “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.”
In addition, the EC said it is opening a second antitrust investigation involving Amazon’s “Buy Box” and whether the company is also abusing services such as Prime to favor its own products or merchants that use its logistics services.
The case comes amid growing concern across Europe about the expansion of Amazon’s influence amid a pandemic that has forced many local physical retailers to remain closed. While the investigation was previously announced two years ago, regulators here are pushing even harder to ensure some kind of level playing field among all ecommerce players.
We reached the preliminary conclusion that @amazon illegally has abused its dominant position as a marketplace service provider in DE & FR. @amazon may have used sensitive data big scale to compete against smaller retailers. Now for @amazon to respond. @EU_Competition
— Margrethe Vestager (@vestager) November 10, 2020
According to the statement released by regulators, the concern centers on Amazon’s role as a platform that enables third-party vendors to sell their goods while at the same time selling competing products made by Amazon. Regulators accused Amazon of abusing the data it collects on those third-party sales in order to boost its own offerings.
EC regulators said Amazon’s role as a platform gives it access to third-party data such as the number or orders, products shipped, and merchant revenues. According to its investigation, Amazon’s retail employees have been accessing that data and using it to “calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers.”
By using its platform to reduce the risk of competition, the EC believes Amazon is in violation of antitrust rules.
“Its rules should not artificially favor Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services,” Vestager said in her statement. “With ecommerce booming and Amazon being the leading ecommerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Amazon has not yet issued a statement on the latest news.
Regarding the new investigation, the EC noted that the “Buy Box” on Amazon’s site makes it easier for consumers to add products from third-party retailers to their baskets. Getting selected to be featured in the “Buy Box” is a coup for retailers. Likewise, the EC is looking at how Amazon controls access to its Prime subscription delivery service, a critical gateway as it accounts for a growing portion of sales on the platform.
The EC said it will examine both services to see if they “lead to preferential treatment of Amazon’s retail business or of the sellers that use Amazon’s logistics and delivery services.”
These cases will likely take years to resolve. Still, it comes as the EC is pursuing multiple antitrust cases against Google and Apple. Under Vestager’s leadership, the EC has carved out a reputation as being tougher on big tech companies than U.S. regulators. Though that may be shifting with the recent filing of an antitrust cased filed against Google by the U.S. Department of Justice.
VentureBeat has reached out to Amazon for comment and will continue to update this story.
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