The European Commission has launched a formal antitrust investigation into potential anti-competitive practices by the online retail giant Amazon.
Amazon’s online platform serves two main functions: enabling the company to sell its own products as a retail operator; and providing independent vendors with a marketplace through which to sell their products directly to consumers. In its capacity as a marketplace, Amazon collects data on sellers’ activity on the platform; however, the Commission suspects the company of using sensitive data it has gleaned on marketplace users, the transactions they conduct and the products they sell to inform its commercial activities, in breach of the EU’s antitrust and anti-competition regulations.
The Commission’s investigation into Amazon antitrust practices will examine:
- The terms of Amazon’s standard agreement with sellers using its marketplace regarding the collection and analysis of data, with particular reference to whether Amazon’s possession of market seller data could affect its competitive status; and
- The usage of seller data in allocating coveted ‘Buy Box’ status, whereby retailers receive prominent placing on the marketplace webpage and customers are able to add items directly to their shopping carts from selected retailers.
Commissioner Margrethe Vestager, in charge of competition policy, said: “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.”
If proven to be accurate, the Amazon antitrust allegations would show the company to have breached EU laws governing anticompetitive practices and abuse of a dominant position. The Commission has informed Amazon of its decision to open the investigation, which it says will be conducted ‘as a matter of priority’.
