Amazon has been hit with formal antitrust charges for allegedly abusing its dominance in online retail.
Today, the executive branch of the European Union accused the e-commerce giant of unfairly competing with sellers on its platform in Germany and France. According to European Commission executive vice president Margrethe Vestager, Amazon — which functions as both a retailer and a marketplace — used third-party merchants’ data to determine what products to launch, as well as the prices of these offerings, under its own brand.
“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,” she wrote in a statement. “The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favor Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services.”
Vestager added, “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.”
In a statement to FN, Amazon wrote, “We disagree with the preliminary assertions of the European Commission and 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.”
According to a spokesperson for the company, Amazon represents less than 1% of the global retail market, and more than 150,000 European businesses sell through its online stores, generating tens of billions of euros in revenues every year.
The commission’s formal probe into the retailer’s business practices was launched last year in July. With today’s preliminary findings, it reported that Amazon breached EU antitrust laws but added that the investigation must be completed before it could slap any penalties on the company.
What’s more, the European Commission opened a second investigation into whether Amazon is giving preferential treatment to its own retail business as well as marketplace sellers who use its logistics and delivery services. In particular, it is looking into the criteria the e-tailer uses to select the winner of its “Buy Box,” which is displayed prominently on its website and allows customers to add items from a specific retailer directly into their shopping carts. It also intends to examine whether it favors certain sellers when it comes to featuring and offering products to members of its Prime subscription service.
“Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon’s marketplaces than non-Prime users,” added the commission.
In recent years, regulators have ramped up investigations on tech giants due to concerns over potential antitrust law violations. Over the summer, Amazon CEO Jeff Bezos, Facebook CEO Mark Zuckerberg, Apple CEO Tim Cook and Google parent Alphabet CEO Sundar Pichai were questioned by members of the United States’ House Antitrust Subcommittee about purported anticompetitive behavior and theft of digital content, among other issues surrounding Big Tech’s dominance.