Amazon Found to Be Violating European Union’s Antitrust Laws

In a preliminary finding, Margrethe Vestager, the European Commission’s head of competition policy, said Amazon was using non-public data to undermine competitors.

On Tuesday, the European Union filed antitrust charges against Amazon, accusing the company of unfair and anticompetitive behavior against the 150,000 European merchants that rely on it.

Margrethe Vestager, who runs digital and competition policy for the EU’s Executive Commission—the 27-nation bloc’s executive branch—raised two sets of concerns in the complaint. 

The first stems from a yearlong EU probe that found Amazon abused its status as a “dual-role platform” to extract non-public data from its retail and merchant services. Amazon then used this data to offer copies of popular products at a lower price, in violation of EU competition laws. Famously, Amazon does this in the United States, too.

At the same time, Vestager announced a separate inquiry was launched into Amazon’s “buy box,” a key part of Amazon’s website where most of its sales take place. The EU’s investigation will look at if Amazon is using to give preferential treatment to its own products and those of sellers who pay extra for Amazon’s logistical services.

“We must ensure that dual-role platforms with market power, such as Amazon, do not distort competition,” Vestager said in a statement announcing the charges. “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.”

Over the past few years, Vestager has emerged as a fierce critic of corporate tech giants, pushing an increasingly aggressive agenda that has grown beyond collecting tens of billions of dollars worth of fines from companies, but failing to alter their behavior. Vestager has made it clear that she thinks other tools (e.g. injunctions) must be used to force compliance among corporate tech giants as she believes fines have limitations. Just last year told EU lawmakers fines are “not doing the trick” and the EU would “have to consider remedies that are much more far-reaching.” In December, the European Commission plans to introduce the Digital Services Act, a potentially “revolutionary” set of regulations that could reshape business models industry wide by, among other things, requiring the disclosure of black-box algorithms.

In a Congressional hearing, Amazon’s associate general counsel, Nate Sutton, told Congress the company did not use seller data “when we’re making decisions to launch private brands.” A Wall Street Journal investigative report, however, found that “employees have used data about independent sellers on the company’s platform to develop competing products.” The House Antitrust Report also directly contradicts that claim, with the House Judiciary Committee’s chairman David Cicilline sharing that they’ve “heard so many heartbreaking stories of small businesses who sunk significant time and resources into building a business and selling on Amazon, only to have Amazon poach their best-selling items and drive them out of business.”

The statement offers some clear examples of Amazon’s anticompetitive behavior, finding in its preliminary view that Amazon’s non-public seller data “allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.” Thanks to this, Amazon can “avoid the normal risks of competition” and “leverage its dominance” in “France and Germany- the biggest markets for Amazon in the EU.” 

Amazon’s use of non-public data is currently under investigation in Germany for possible violations of its competition rules. Under E.U. rules, the company will now be able to respond to the EU’s preliminary findings, kicking off a process that could take months, or years, to be resolved.

Via Motherboard

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