EU accuses Amazon of antitrust violation over marketplace data

In addition, the Commission also opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics

London: The European Commission has reached a preliminary conclusion that Amazon has illegally abused its dominant position as a marketplace service provider in Germany and France, breaching EU antitrust rules by distorting competition in online retail markets.

In addition, the Commission also opened a second antitrust investigation into Amazon’s business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon’s logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).

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“Amazon may have used sensitive data on a big scale to compete against smaller retailers,” said Executive Vice President Margrethe Vestager, in charge of the competition policy.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” she said in a statement on Tuesday.

The Commission took issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon’s own retail business, which directly competes with those third party sellers.

In a statement, Amazon said it will “continue to make every effort to ensure it has an accurate understanding of the facts”.

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” the company said.

“There are more than 150,000 European businesses selling through our stores that generate tens of billions of Euros in revenues annually and have created hundreds of thousands of jobs.”

The Commission said that its preliminary findings showed that very large quantities of non-public seller data are available to employees of Amazon’s retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers.

For example, it 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 Commission’s preliminary view is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany — the biggest markets for Amazon in the EU.

If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.

In a second case, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon’s Prime loyalty programme, lead to preferential treatment of Amazon’s retail business or of the sellers that use Amazon’s logistics and delivery services.

The Commission opened the in-depth investigation into Amazon’s use of marketplace seller data on July 17, 2019.