European Union regulators have brought anti-trust charges against Amazon, accusing the retail giant of using sensitive data from the third-party sellers who use its marketplace to gain unfair advantage for its own retail business.
It follows the investigation into Amazon's dual role as both a marketplace and vendor, which opened in July 2019 and which the Booksellers Assocation said at the time was "heartening" to see.
The European Commission said on Tuesday (10th November) that Amazon had been informed of the EU's preliminary view that it has "breached EU antitrust rules by distorting competition in online retail markets". The commission said it particularly takes 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". It said 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".
Executive vice-president Margrethe Vestager, in charge of competition policy, said: "We must ensure that dual-role platforms with market power, such as Amazon, do not distort competition. 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."
Amazon has released a statement to say it disagrees with the commission’s allegations and 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."
Assessing how strong a case the commission has against Amazon, a legal expert indicated to the FT that the EU's case could be on shaky ground. Alfonso Lamadrid, a lawyer with Garrigues in Brussels, told the outlet it was "targeting a business model that is very common in retail" and it would need "to show that Amazon is an indispensable channel for sellers, and that Amazon’s conduct would likely drive sellers out of the market".
Meanwhile a second formal anti-trust investigation has been opened "as a matter of priority" by the EC, looking into Amazon's practices regarding its "buy box" and Prime label, specifically whether it artificially favours its own retail offers and the offers of those sellers that use Amazon's logistics and delivery services. As part of this the commission will be looking into the criteria Amazon sets to select the winner of the "buy box" and that which allows sellers to offer products to Prime users. "Winning the 'Buy Box' (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers," it explains, "as the buy box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales."