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European Commission set to file antitrust charges against Amazon

Image credit: Reuters

According to a Wall Street Journal report, the EU is preparing to file antitrust charges against Amazon for allegedly using third-party vendor data to compete against them.

The report suggests that the formal charges could be filed as early as next week, although it could be another 12 months until the European Commission decides whether Amazon broke the law.

The EU may have been investigating Amazon’s alleged anticompetitive practices for almost two years. In September 2018 EU competition chief Margrethe Vestager indicated that the EU had been gathering information from third-party sellers about Amazon’s treatment of them, and in July last year the European Commission opened an investigation into Amazon’s handling of third-party sellers' data. This focused on how Amazon uses these data to decide which seller will provide a product via its 'Buy Box'. Commenting at the time, Vestager said that it is crucial to ensure that online platforms do not eliminate the benefits of e-commerce through anticompetitive behaviour.

Amazon said that it would cooperate fully with the investigation.

Recently, the Wall Street Journal also revealed through interviews with more than 20 former employees that Amazon uses sales data from third-party sellers to inform the development of Amazon-branded products despite these practices being against Amazon’s own rules. Following the report, tech hawks in Congress called for a criminal antitrust investigation into Amazon.

According to sources close to the EU case, EU authorities will accuse Amazon of using data harvested from sellers to compete against them on its own platform.

If Amazon is found to have broken these antitrust rules, it could face a fine up to 10 per cent its annual revenue (amounting to tens of billions of euros) and be forced to change its practices. However, Amazon would have the right to appeal this fine.

Under Vestager, the EU has taken a strong stance against antitrust in the tech sector. The European Commission has fined Google parent company Alphabet more than €8bn over three antitrust cases since 2017 (for manipulating its search engine results to promote its own shopping service, for exploiting the dominance of Android OS, and for blocking rival online search advertisers). Google is appealing theses fines.

Meanwhile, the myriad voices calling for Amazon to be broken up have been joined by former senior Amazon engineer Tim Bray, who resigned in protest against the company’s treatment of internal critics in May.

Speaking during a remote meeting of union members around the world, Bray commented: “Why on earth should an online retailer, a cloud-computing company, a smart-speaker company, an organic-supermarket company, and a video-production company all be conglomerated into one corporate entity controlled by one person?”

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