Does Amazon use data to gain advantages over third-party providers? The EU competition watchdogs assume this. It could therefore be expensive for the company.
The world’s largest online retailer, Amazon, is violating antitrust regulations, according to the EU competition watchdog. The company was accused of systematically using non-public business data from independent retailers for its own retail business, the EU Commission in charge announced in Brussels on Tuesday.
According to the authority, Amazon now has the opportunity to comment on the objections. If the competition watchdogs then stick to their assessment, Amazon could face a billion-dollar fine. If companies violate EU competition rules, they risk fines of up to ten percent of their annual global sales. Amazon’s revenues in 2019 were approximately $ 280.5 billion.
Investigation initiated in July 2019
The EU’s competition watchdogs launched an investigation into potentially illegal business practices in July 2019. Above all, they are looking into the question of whether the group is unfairly competing with other retailers who use its platform.
This is possible because Amazon not only sells goods itself as a retailer, but also makes its website available as a platform for other retailers.
Regarding the objections, the EU Commission now writes that the results of the investigation showed that the employees of the Amazon retail store had very large amounts of non-public seller data at their disposal, which flow directly into the automated systems of the store, where they were aggregated and used to balance end customer offers and strategic business decisions from Amazon. This is to the detriment of the other sellers on the marketplace.
EU Commission: Amazon must remain fair
Amazon could, for example, concentrate its offers on those products in a category that sold best and adapt its offers on the basis of non-public data from competing sellers.
“Amazon should not use data on the activities of independent sellers to its own advantage if the company competes with these sellers,” commented the responsible Vice President of the EU Commission, Margrethe Vestager. The competitive conditions on the Amazon platform must be fair.