The European Commission today announced that it has opened a formal antitrust investigation on Amazon. EC feels that Amazon may have used sensitive data from independent retailers who sell on its marketplace, such usage is against EU competition rules.
The main problem for Amazon is that it acts both as a retailer and a marketplace. As per EC’s preliminary finiding, Amazon used competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace in order to promote its retail business.
As part of the investiagration, European Commission will look into:
- The standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
- The role of data in the selection of the winners of the “Buy Box” andthe impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.
“European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules,” said Commissioner Margrethe Vestager.
If proven, Amazon may face huge fines and severe business restrictions.