The EU has hit Amazon with formal antitrust charges over its treatment of the 150,000 European merchants selling goods through its website.
Margrethe Vestager, who oversees the EU’s competition policy, outlined two sets of concerns against the world’s dominant online retailer.
After a year-long probe, the European Commission reached the preliminary view that Amazon breached EU competition rules by using non-public data it gathers on sales on its website to boost its own-label products and services.
The EU has separately opened a second formal antitrust investigation into whether Amazon gave preferential treatment on its site to its own products and for sellers who paid extra for Amazon’s logistics and delivery services.
“We must ensure that dual-role platforms with market power, such as Amazon, do not distort competition,” said Ms 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.”
Ms Vestager held out the possibility that the EU would work to settle the complaints with Amazon. She has previously acknowledged that large fines have not helped to remedy the dominant positions of Big Tech companies.
“I recognise that in other cases Amazon has been very forthcoming to solve the issues at stake,” she said. “Some of the national competition authorities have had the same experience of finding issues where they had preliminary conclusions where also Amazon has engaged in finding solutions.”
The EU said its investigation revealed the US ecommerce giant uses private business data about the sellers in its vast marketplace to compete with those sellers. “[The data] allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers,” the statement said.
As result, Amazon can “avoid the normal risks of retail competition”, the EU said.
German competition authorities have been investigating Amazon’s use of data for two years but have yet to bring charges. The US group said it disagreed with the findings, and would “continue to make every effort to ensure [the European Commission] has an accurate understanding of the facts”.
“There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually,” the company said.
Nate Sutton, Amazon’s associate general counsel, testified to the US Congress this year that the retailer did not use the individual data about sellers on its platform “when we’re making decisions to launch private brands”.
But after a report by the Wall Street Journal contradicted his testimony, Jeff Bezos, Amazon’s chief executive, promised an investigation and told Congress that he was “not satisfied that we have gotten to the bottom of it”.
Nevertheless, legal experts raised doubts about the strength of the EU’s case. “The [EU’s charges] seem to be targeting a business model that is very common in retail and that has generally been a source of more, not less, competition,” said Alfonso Lamadrid, a lawyer with Garrigues in Brussels. “As the law stands in the EU, even dominant companies are not subject to a general duty of neutrality.”
He added: “To be on safe ground, the commission would need to show that Amazon is an indispensable channel for sellers, and that Amazon’s conduct would likely drive sellers out of the market. This might be challenging. It takes a confident enforcer to run a hard case like this one.”
