The European Union may file formal antitrust charges against Amazon due to its treatment of third-party sellers next week, the Wall Street Journal reported on the basis of anonymous sources. The European Commission, which is EU’s antitrust regulator, has reportedly been working on these charges for a couple of months. The Commission has been investigating Amazon’s alleged mistreatment of sellers that use its platforms for nearly two years.
The crux of the matter is Amazon’s dual role as a marketplace operator and a seller of its own products. The EU, in its charges, reportedly accuses Amazon of using data of third-party sellers to compete against them. If Amazon is found to be violating EU’s competition law, it could be fined as much as 10% of its global revenue.
The EU is not the one to be suspicious of Amazon’s activities. Earlier in April, US lawmakers had alleged that Amazon might have lied to the American Congress about the methods it uses against its competitors on its platform whereby Amazon used data of third party sellers to develop competing products. This is despite Amazon’s Associate General Counsel (Litigation and Regulatory) Nathan Sutton testifying before the House Judiciary’s subcommittee on antitrust that the company does not “use individual seller data to directly compete with them” in July 2019. American lawmakers had started investigating Amazon’s practices in September 2019.
This developments comes at the heels of EU’s Competition Commissioner Magrethe Vestager comments to a German newspaper where she wanted “to prevent the monopoly-like situations” seen with Amazon, Google and Facebook from being repeated.
In India, too, when US President Donald Trump had visited India in February, the Confederation of All India Traders (CAIT), in a letter to him, had said that Indian e-commerce market has been harmed by the “malpractices” and “unethical” policies of American e-commerce companies which include predatory pricing, deep discounting and other practices in both e-commerce and retail “bringing a bad image about USA and its business ethics”.
And Amazon is not the only e-commerce platform to draw the ire of third-party sellers. All India Online Vendors Association had filed a case against Flipkart for abusing its dominant position and acting as both a marketplace and a seller. The National Company Law Appellate Tribunal (NCLAT) had eventually ruled in favour of Flipkart.