EU starts antitrust inquiry into Amazon use of retailer data
18 Jul 2019
The European Commission has opened a formal antitrust investigation to assess whether Amazon's use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules
18 Jul 2019
Commissioner Margrethe Vestager, in charge of competition policy, said: ‘European consumers are increasingly shopping online. E-commerce 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.
‘I have therefore decided to take a very close look at Amazon's business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.’
When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on the Commission's preliminary fact-finding, Amazon appears to use competitively sensitive information about marketplace sellers, their products and transactions on the marketplace, which may influence their ranking on its site and thus their ability to attract customers.
As part of its in-depth investigation the Commission will look into the standard agreements between Amazon and marketplace sellers, which 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.
It will also consider 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. The Commission says winning the ‘Buy Box’ seems key for marketplace sellers as a vast majority of transactions are done through it.
The EU is said to be interested in what data Amazon uses to pick a seller as the default option for a particular product when a user clicks the ‘buy’ button, and whether Amazon has an unfair advantage to be designated the default for the products it sells.
If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).
The Commission has informed Amazon and the competition authorities of the member states that it has opened proceedings in this case.
An Amazon spokesman said: ‘We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.’
There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
Pat Sweet | 18-07-2019