The European Commission has determined that Amazon is violating antitrust laws by “distorting competition in online retail markets.” It has also opened a second antitrust investigation into the online retailer to determine whether it undermines third-party sellers.

“We reached the preliminary conclusion that Amazon illegally has abused its dominant position as a marketplace service provider in [Germany and France],” EU Competition Commissioner Margrethe Vestager tweeted of the charges. “Amazon may have used sensitive data [and] big scale to compete against smaller retailers.”

More formally, the EU charges that Amazon “systematically relies on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon’s own retail business, which directly competes with those third-party sellers.”

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” a quote attributed to Ms. Vestager notes. “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. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favor 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.”

Put simply, Amazon is doing on its own website what Google does: Because it is the gatekeeper to customer searches, it knows what products and services are popular and trending[,] and then it redirects their customers to its own alternatives.

As to the second investigation, it appears to be an extension of the current charges. In this case, Amazon is also extending its abuse to include its logistics and delivery services (which is referred to on Amazon.com as “fulfillment by Amazon or FBA sellers”).

“The Commission will investigate whether the criteria that Amazon sets to select the winner of the ‘Buy Box’ and to enable sellers to offer products to Prime users, under Amazon’s Prime loyalty program, lead to preferential treatment of Amazon’s retail business or of the sellers that use Amazon’s logistics and delivery services,” the EU says.

Tagged with EU, European Commission