After facing a US Congressional hearing on anti-trust, both Canadian and German anti-trust watchdogs are now probing Amazon for competition concerns.
Canada’s Competition Bureau has invited market players to provide their inputs on whether Amazon’s practices are harming consumers and companies. The regulator’s ongoing probe will look to understand whether Amazon’s policies for third-party sellers impact the pricing of products, and the sellers’ dependence on Amazon, given that sellers have to use Amazon’s Fulfilment tag and advertise on Amazon. The bureau will look at whether Amazon’s practices influences consumers to purchase its products over those offered by competing sellers.
Amazon said it was cooperating with the bureau’s investigation and would continue to support small and medium businesses, per Reuters. Big Tech companies, including Amazon, have been facing increased regulatory scrutiny in the US and in other countries.
Germany’s anti-trust regulator is also looking into Amazon’s relationship with third-party sellers, Andreas Mundt, the head of the Federal Cartel Office, has reportedly said. Mundt said that during the initial months of the COVID-19 pandemic, there had been complaints that Amazon had blocked some traders because of allegedly high prices, reported Reuters. According to CNBC, there were allegations of Amazon sellers inflating prices of hand sanitisers and masks.
Until 2013, Amazon had prevented sellers from providing their products at cheaper rates on website. A spokesperson for the German regulator told CNBC that it is “not up to a private platform to be a price regulator or the price police”. The German anti-trust regulator had forced it to stop this practice.
Bezos admits to using seller data to help private label products in US Congressional hearing
In a US Congressional hearing on anti-trust, Congressman David Cicilline, chair of the house subcommittee on antitrust, said that Amazon controls 75% of all online marketplace sales and its market share is seven times the market share of its closest competitor.
In a major concession, Amazon founder and CEO Jeff Bezos told the subcommittee that although Amazon has a policy against using [not accessing] seller-specific data to aid its private label business, he “cannot guarantee that that policy has never been violated”.
Further questioning indicated the possibility that Amazon has used aggregate data from third-party sellers to build their own competing private label products, something that Amazon’s Nathan Sutton had declined was happening in July 2019. Bezos revealed that Amazon employees have access to “highly detailed data”.