Amazon hit with EU antitrust charges, new accusations of abusing dominance
It's a double whammy for Amazon in Europe, as it comes under fire from the Competition Commission twice in one day.
Margethe Vestager announced charges against Amazon on Tuesday.
Amazon is under fire in Europe. On Tuesday, European Competition Commissioner Margrethe Vestager announced formal antitrust charges against Amazon over how the tech giant uses data about merchants on its platform, as well as a brand new investigation into the retailer.
Amazon has faced increasing scrutiny from regulators both in the EU and US, part of a broader backlash against Big Tech and the power that it wields. The company is under scrutiny in New York and in Congress for similar reasons.
In Europe, the Commission has been investigating Amazon's dual role as a platform for merchants and as a rival to those merchants for the past two years. Vestager announced that following the investigation, the Commission had found Amazon guilty of abusing its dominant position as the biggest online marketplace in France and Germany -- Europe's two biggest markets.
The Commission's investigation discovered that large quantities of data about third-party sellers were available to Amazon employees and flowing into the company's automated systems. Access to this data gives Amazon an unfair advantage, the Commission said, as it allows the company to operate without the normal risks involved in retail competition.
"We must ensure that dual role platforms with market power, such as Amazon, do not distort competition," said Vestager in a statement. "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."
We reached the preliminary conclusion that @amazon illegally has abused its dominant position as a marketplace service provider in DE & FR. @amazon may have used sensitive data big scale to compete against smaller retailers. Now for @amazon to respond. @EU_Competition
— Margrethe Vestager (@vestager) November 10, 2020
As this is a preliminary decision from the Commission, Amazon will have a chance to respond before any fines are issued. Amazon didn't immediately respond to a request for comment.
The second investigation announced by Vestager will look into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services. In particular, it will examine how sellers are selected to appear in the "Buy Box" on the right side of the page when you're browsing the website. Appearing in the Buy Box gives a significant advantage to sellers as their products are heavily promoted to Amazon Prime users.
Antitrust heats up around the world
This is far from the first time Amazon has come under fire from the EU Competition Commission. Back in 2017, Amazon agreed to change its ebook contracts with publishers after another lengthy investigation. Vestager also led that investigation, as well as a number of other successful investigations into US tech giants, including Apple and Google.
Vestager has a reputation for being fearsome and unflinching when facing down the world's wealthiest and most powerful companies, and has long asserted that she is determined to ensure companies are behaving legally and that European consumers are getting the best deal.
Europe has a long history of pursuing antitrust investigations into tech giants, but the US is increasingly following suit. The House of Representatives antitrust subcommittee also accused Amazon, along with Facebook, Apple and Google, of stifling competition and harming US consumers in an October report.
Earlier this year, Amazon CEO Jeff Bezos gave testimony to the subcommittee, saying: "I believe Amazon should be scrutinized. We should scrutinize all large institutions, whether they're companies, government agencies or nonprofits. Our responsibility is to make sure we pass such scrutiny with flying colors."
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