Amazon faces EU competition probe

Company's dual role as retailer and marketplace is being investigated.

Amazon: collects data about independent retailers on its platform
Amazon: collects data about independent retailers on its platform

Europe’s competition watchdog has opened a formal investigation into Amazon over its use of sensitive data from independent retailers that sell on its marketplace. 

The European Commission today said Amazon, as both a product seller and a marketplace, appears to use competitively sensitive information by continuously collecting data from independent retailers that use its platform.

Amazon is now being investigated over:

  • The standard agreements between Amazon and marketplace sellers that allow Amazon's retail business to analyse and use third-party seller data. In particular, the commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
  • The role of data in the selection of the winners of the "buy box" and the impact of Amazon's potential use of competitively sensitive marketplace seller information on that selection. The "buy box" is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the "buy box" seems key for marketplace sellers as a vast majority of transactions are done through this method. 

If the allegations are proven, Amazon may be in breach of European Union competition rules on antitrust agreements between companies or abusing a dominant market position.

Amazon has increased the number of own-brand and exclusive ranges that it offers, as well as giving its own products favourable placement on its platform. Last year, it opened a physical retail format in New York, Amazon 4-star, that only sells products rated four stars or above on the site and features many of Amazon’s own products.

The competition commissioner, Margrethe Vestager, said: "European consumers are increasingly shopping online. Ecommerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don't eliminate these benefits through anti-competitive behaviour."

Vestager has led three antitrust investigations against Google that have resulted in multibillion-euro fines.

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