The logo of Amazon is pictured inside the company's office in Bengaluru, India. Picture taken April 20, 2018. REUTERS/ABHISHEK CHINNAPPA
The logo of Amazon is pictured inside the company's office in Bengaluru, India. Picture taken April 20, 2018. REUTERS/ABHISHEK CHINNAPPA

Brussels — Amazon.com became the EU’s latest big tech target as regulators escalated a case into how it uses rivals’ sales data on its platform and added a new probe into whether it unfairly favours its own products.

The European Commission said it suspects Amazon violated antitrust rules over its use of non-public business data from independent sellers on its marketplace that could benefit the company’s own retail arm. The EU regulator will also probe how Amazon chooses products for a prominent “buy box” and whether Amazon pushes retailers to use its own logistics and delivery services.

“We do not take issue with the success of Amazon or its size,” Margrethe Vestager, the EU’s antitrust commissioner, told reporters at a media conference in Brussels on Tuesday. She said the EU’s concerns focus on “very specific business conduct” linked to Amazon’s dual role as a retailer and a platform for smaller merchants.

An EU statement of objections for Amazon raises the risk of potential fines or a possible order for it to change business practices. Vestager has been ramping up scrutiny of many other big tech firms, adding probes into Apple and Facebook as well as $9bn in fines for Google. Regulators are also weighing new rules for online giants that critics say run a rigged game when they set the rules for platforms that also host their competitors.

Amazon disagrees with the EU’s assertions and “will continue to make every effort to ensure it has an accurate understanding of the facts” it said.

Amazon shares slid more than 2% in premarket trading.

“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate,” the company said. “There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually and have created hundreds of thousands of jobs.”

While Amazon’s global sales last year were $280.5bn, any fine is likely to be far less than the 10% of annual revenues the EU could levy — and would be based on sales in European markets. Amazon made $22.2bn in Germany and $17.5bn in the UK in 2019, the only European sales it breaks out.

Amazon has about 3-million active merchants selling products on its site, with about a third of those in Europe, according to a 2019 report by e-commerce analysis firm Marketplace Pulse.

Avoid risks

The EU warned in 2019 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.

Regulators say the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and allows it to abuse a dominant position as an online host for merchants in France and Germany. Amazon’s retail arm can access “very large quantities of non-public seller data” which flow into automated systems that can calibrate Amazon’s own retail offers. That can help Amazon make “strategic business decisions” that might harm other sellers.

The new investigation focuses on the “buy box” in which Amazon highlights sellers of a particular product. About 80% of sales go to the winner of the buy box, Vestager said. The EU will check how Amazon selects the winners of that box and how sellers can offer products to the Prime loyalty programme.

Officials will also check if that effectively favours Amazon’s own products and sellers that use Amazon’s logistics and delivery service.

Bloomberg

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.