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November 10, 2020updated 03 Aug 2022 9:53am

Amazon charged with ‘illegally distorting’ competition on marketplace as regulators continue war on Big Tech

E-commerce giant exploits vendor data for its own benefit, commission claims

By Matthew Gooding

Amazon “illegally abused” its position to distort competition on its marketplace, according to antitrust charges filed by the European Commission today.

The charges state the e-commerce giant illegally used data from third-party sellers to inform its own commercial activities, stifling competition in the process. They come following a year-long antitrust probe by the commission into Amazon’s activities.

EU Commissioner Margrethe Vestager also revealed a second investigation was being launched into how products are selected to appear in the so-called buy-box on Amazon’s site, which promotes items it thinks the consumer will be interested in and accounts for a large proportion of sales.

Amazon now faces antitrust probes on both sides of the Atlantic, as regulators continue their crackdown on the activities of Big Tech.

Announcing the Amazon antitrust charges, Commissioner Vestager said the investigation, which began last July, found that “Amazon illegally abused its dominant position as a marketplace service provider in Germany and France, the biggest markets for marketplace services in the European Union.

“We do not take issue with the success of Amazon or its size. Our concern is specific business conduct which appears to distort competition.”

Amazon antitrust case: the charges

The commission alleges that Amazon aggregates information from more than 800,000 EU-based third-party sellers that list over a billion items on its platform, obtaining real-time insights on consumer behaviour. It can then use this information to make decisions about which products it should sell and at what price.

Commissioner Vestager said that Amazon’s own merchandise accounts for less than 10% of some product categories, but can attract more than 50% of revenue.

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“Very granular real-time business data relating to third-party seller’s listings and transactions on Amazon’s platform may systematically feed into the algorithm of Amazon’s retail business,” she added.

The commission believes this behaviour restricts the ability of third-party sellers, which rely on Amazon’s platform, to grow and compete with the American firm.

Commissioner Vestager said it was “premature” to discuss any potential remedies, and added that the commission awaits Amazon’s response to the charges.

Regulators target Big Tech

It is the latest move in an increasingly heated battle between Big Tech and regulators around the world. Amazon is also facing up to antitrust proceedings in the US brought by the Justice Department and the Federal Trade Commission, and is also one of a number of tech firms being scrutinised by the US House Judiciary Committee.

Last week Tech Monitor reported that Google is facing antitrust charges over its dominance of the search market, a case which could bring about radical changes to the way we search the internet.

Critics of the European Commission say Amazon is being unfairly targeted:

A spokesman for Amazon said: “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.”

The spokesman added that the company represents less than 1% of the global retail market. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”

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