Amazon charged with breach of EU antitrust laws on market data

The EU accuses Amazon of abusing the data it collects from third-party sellers on its platform, EU Commissioner Margrethe Vestager announced today. The European Commission says Amazon “systematically” uses non-public data from sellers in markets to unfairly compete with sellers in France and Germany. The charges are the result of an investigation announced last year that examined how Amazon uses sales data to compete with platform independent merchants.

Here is what the Commission specifically opposes:

The Commission’s preliminary view, set out in its Statement of Objections, is that the use of non-public data on market sellers enables Amazon to avoid the normal risks of retail competition and to take advantage of its dominant position in the market for the provision of market services in France and Germany – Amazon’s largest markets in the EU.

The Commission believes that “very large amounts of non-public data on sellers” are being used to aid Amazon’s retail business “to the detriment of other sellers in the market”. Amazon will have an opportunity to respond to these claims in the coming weeks, Vestager said.

In a statement, Amazon said it did not agree with the Commission’s allegations, adding that it “would continue to do everything possible to ensure that it understood exactly the facts.”

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” the company said. “There are more than 150,000 European companies selling in our stores which generate tens of billions of euros in revenue per year and which have created hundreds of thousands of jobs.”

The Commission also announced today that it is opening a second antitrust investigation into the company to determine whether it is giving preferential treatment to its own retail offerings and to sellers in the marketplace who use its logistics and delivery services. . In particular, this survey will examine how Amazon decides which merchant to link to using their “buy box”.

“Data on the activity of third-party sellers should not be used for the benefit of Amazon when it acts as a competitor of these sellers,” Margrethe Vestager said in a statement. “The conditions of competition on the Amazon platform must also be level. Its rules should not artificially favor Amazon’s own sales offerings or take advantage of offers from retailers using Amazon’s logistics and delivery services. “

Amazon’s Marketplace platform, which now accounts for more than half of its physical merchandise sales, has been under intense scrutiny for years. Most notably, earlier this year, federal lawmakers toasted Amazon CEO Jeff Bezos over his treatment of third-party sellers. The hearing followed a report by The Wall Street Journal who claimed that Amazon uses data from independent sellers on its platform to develop and launch competing products.

In response to the WSJ investigation, Amazon said that while it uses “sales and store data to provide our customers with the best possible experience,” it prohibits its employees from using “non-public and seller-specific data to determine products private label to launch ”. However, during the US antitrust hearing in July, Bezos said he could not guarantee that this policy was never violated.

In August, there were early signs that the US investigation was entering a new phase after reports emerged that the attorneys general of New York and California, as well as the Federal Trade Commission, planned to investigate the Amazon platform.

Some European countries have also carried out their own surveys. Last year, the same day the EU announced its investigation, Amazon agreed to change its terms of service for third-party merchants in response to an investigation by German regulators. In particular, the company agreed to give sellers 30 days’ notice and a reason before removing them from its platform.

The EU press release that there is no legal deadline for the conclusion of its antitrust investigation. However, if he is found guilty, The Wall Street Journal notes that Amazon could be fined up to 10% of its global annual revenue. That translates to around $ 28 billion when you consider its profits in 2019.

Update November 10, 8:24 a.m. ET: Updated with a statement from Amazon.