Amazon to face EU antitrust complaint over sales data

An Amazon fulfillment centre in Frankenthal, Germany, on Oct 13. — Bloomberg Inc faces an antitrust complaint from European Union regulators, escalating an investigation into how it handles data from rival sellers on its massive online retail platform.

Margrethe Vestager, the EU’s antitrust chief, will announce a so-called statement of objections on Nov 10 targeting the world’s biggest online retailer, according to people with knowledge of the case who spoke on condition of anonymity.

The EU document will lay out concerns that Amazon shortchanges rival sellers – raising the risk of a potential fine as high as 10% of yearly sales and a possible order to change its business model.

The move, which escalates a probe into Amazon’s role as both direct retailer and a host to other online stores, makes the company the highest profile Big Tech target for one of the world’s toughest antitrust regulators. EU regulators are wrestling with how to act against online giants that critics say run a rigged game when they set the rules for platforms that also host their competitors.

Amazon and the European Commission declined to comment.

The European Union warned last year that it was probing suspicions that Amazon could spot best-selling products and start stocking the same thing itself – essentially cherry-picking the most profitable or high-volume goods. Amazon’s agreements with marketplace sellers allow the company to collect "competitively sensitive information” on what’s selling and how much of a product merchants might have in stock, the European Union said in a July 2019 statement.

The objections aren’t likely to focus on Amazon’s "buy box” that highlights which retailer offers a product, the people said. Most sales on the marketplace come from traders, including Amazon itself, picked for the box by an algorithm. The European Union had been looking at what factors Amazon uses for that algorithm to see if Amazon used the information to make sure its own products win the prize spot.

Amazon has previously said it uses data about individual sellers only to support them or enhance the customers’ experience. It said it doesn’t allow the use of individual sellers’ data to compete with them, including decisions Amazon takes to source, price or stock items.

Regulators quizzed about 1,500 retailers and received 700 gigabytes of data from Amazon in an initial early-stage investigation into the company.

Amazon joins a long list of US technology companies targeted by Vestager. Google was fined more than US$9bil (RM37.1bil) after nearly a decade of EU investigations. Apple Inc and Facebook Inc also face early-stage probes. Vestager is separately readying new digital rules that will set guardrails for how big tech firms treat rivals and customers.

While the EU probe is the first directly targeting Amazon’s online retail business model, it’s the third time the company has been probed by the regulator, following tax and e-book investigations.

The Financial Times reported earlier on the timing of the EU move. – Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3



Did you find this article insightful?


Next In Tech News

Amazon, Google vie for piece of India digital payment market
UK watchdog probing Apple on alleged anti-competitive behaviour
Supreme Court says favours controls on video streaming services
Apple-supplier Foxconn flags strong start to year as lockdowns spur electronics demand
Walmart's Flipkart weighs U.S. listing via SPAC merger - Bloomberg News
Thailand probes Facebook’s removal of army-linked accounts
Covid-19 anchors ‘contactless’ in Europe, but consumers weary and wary
WhatsApp is building a self-destructing photo feature
Could fiber-optic technology be used to detect earthquakes?
Why global power grids are still vulnerable to cyberattacks

Stories You'll Enjoy