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EU smacks Amazon with antitrust charges over seller data

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The European Commission has filed charges against Amazon, accusing the tech giant of illegal anti-competitive behaviour regarding its use of third-party sales data, and opened a second investigation into other potential antitrust violations.

The Commission accused Amazon of systematically using non-public sales data regarding third-party sellers on its platform in order to inform its own retail business. According to a Wall Street Journal report, Amazon uses these sales data to inform the development of Amazon-branded products, despite this being against Amazon’s own rules.

Amazon has a dual role as a platform – giving it access to business data such as number of visits to third-party sellers’ offers, activated guarantees, and number of units ordered – and a competitor on its platform. In July 2019, the European Commission announced that it was investing Amazon over its use of these data.

The investigation found that “very large quantities” of non-public seller data are available to employees of Amazon’s retail business, where these data are aggregated and used to calibrate its offers and strategic business decisions “to the detriment of the other marketplace sellers”. For instance, this arrangement allows Amazon to adjust its offers on bestselling products across product categories using insights from these data.

The Commission stated that this allows Amazon to “leverage its dominance” in the French and German markets: its biggest markets in the EU. This could violate Article 102 of the Treaty on the Functioning of the EU, which aims to prevent monopolistic behaviour.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” said EU Competition Commissioner 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.”

The Commission has opened a second antitrust investigation into Amazon, which will focus on the possibility that Amazon may have given preferential treatment to its own retail offers and offers of sellers which use “fulfilment by Amazon” (its own logistics and delivery services for third-party sellers) via promotion in the prominently-displayed “Buy Box”.

If proven correct, this may also violate Article 102.

If Amazon is found to have engaged in anti-competitive behaviour, it is likely to face a fine amounting to billions of euros. Vestager – who has earned a reputation as a tough but fair watchdog leading efforts to hold large US tech companies to account – 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.

Vestager has the power to fine companies up to 10 per cent of their global turnover and force them to change their business practices.

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