The European Commission has taken a preliminary view that Amazon has abused its dominant position in online retail. The Commission accuses Amazon of systematically using the data of independent sellers, to benefit its own retail business, which directly competes with the third-party sellers who use their platform.
Big Data
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This is not about the insights that Amazon retail has into the sensitive business data on one particular sale, rather it is about the insights that Amazon retail accumulated through the business data of more than 800,000 active sellers in the European Union, covering more than a billion products. In other words, this is a case about big data.”
“We have come to the preliminary conclusion that the use of this data allows Amazon to focus on the sale of the best selling products and marginalize third-party sellers, capping their ability to grow.”
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. 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. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Amazon will be given the opportunity to respond to the Commission’s position in the next weeks.
Asked about remedies, Vestager said that it was premature to discuss remedies and that the EU was waiting for Amazon’s responses.
Amazon Prime
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Vestager, said: “[Amazon’s] rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
EU Statement of Objections on Amazon's use of marketplace seller data:
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it 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.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU.
If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
