Accusing Amazon of “systematically relying on non-public business data” of sellers to its own advantage, the European Commission on Tuesday opened a formal antitrust investigation into Amazon’s marketplace and retail practices in Germany and France. The Commission’s executive vice-president, Margrethe Vestager, who is in charge of competition policy, announced the probe.
We reached the preliminary conclusion that @amazon illegally has abused its dominant position as a marketplace service provider in DE & FR. @amazon may have used sensitive data big scale to compete against smaller retailers. Now for @amazon to respond. @EU_Competition
— Margrethe Vestager (@vestager) November 10, 2020
It accused Amazon of leveraging seller data in favour of its own retail business, which competes directly with these sellers. This allowed Amazon to “avoid normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany — the biggest markets for Amazon in the EU”.
The Commission said its preliminary findings, a result of an investigation kicked off in July 2019, show that Amazon’s retail employees have access to “very large quantities of non-public seller data”. This data flows directly into Amazon’s automated systems, which aggregates these data and uses them to “calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers”. Amazon has access to non-public business data of third-party sellers such as number of orders shipped, the seller’s revenues, number of visits to sellers’ offers, shipping-related data, sellers’ past performance, and other consumer claims on products, including the activated guarantees, the Commission said in its statement.
Dual role platforms with market power, such as Amazon, should not distort competition, Executive Vice-President Margrethe Vestager, in charge of competition policy, said. Amazon has breached the EU’s antitrust rules by “distorting competition in online retail markets”, the Commission’s statement said.
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. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services. 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. — Margrethe Vestager
Second probe to look into Buy Box, how sellers are allowed to sell to Prime customers
The Commission has opened a second antitrust probe Amazon’s practices of artificially favouring its own retail offers and those of sellers that use Amazon’s fulfillment services, over independent sellers. In particular, it will examine if these two groups benefited from the criteria that Amazon uses to select winners of “Buy Box” and to enable sellers to offer products to Prime users.
Buy Box is crucial to marketplace sellers and as it prominently displays offers from a single seller for a chosen product, and “generates the vast majority of all sales”. Second, the probe will look at the possibility for marketplace sellers to effectively reach Prime users. “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,” the Commission said.
This probe, covering the European Economic Area (with the exception of Italy), will be carried out “as a matter of priority”. Italy’s Competition Authority is already investigating partially similar concerns, with a particular focus on the Italian market. The Commission will closely cooperate with the Italian Competition Authority throughout the investigation, it said. The EEA includes all the 27 member states of the EU, as well as Iceland, Liechtenstein and Norway.