The European Commission understands that Amazon violates EU antitrust rules. The Vice President of Competition of the European Commission, Margrethe Vestager, reported on Tuesday the Community Executive has reached “the preliminary conclusion that Amazon has illegally abused its dominant position as a provider of market services in Germany and France.”
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“Amazon may have used sensitive data on a large scale to compete with smaller retailers,” Vestager said: “Now Amazon can give its answer.”
Thus, the European Commission has informed Amazon of its preliminary opinion, in which it considers that it has violated EU antitrust rules by distorting competition in online retail markets. “The European Commission objects to Amazon systematically relying on non-public business data from independent sellers who sell on its market, for the benefit of Amazon’s own retail business, which competes directly with those third-party sellers, “Brussels understands.
The European Commission has also opened a second formal antitrust investigation into possible preferential treatment of Amazon’s own retail offerings and those of Amazon’s sellers. market who use Amazon’s logistics and delivery services.
Amazon has a dual role as a platform, explains the Community Executive: it provides a market where independent sellers can sell products directly to consumers; and sells products as a retailer in the same market, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data from third-party sellers, such as the number of product units ordered and shipped, the sellers ‘revenue in the marketplace, the number of visits to sellers’ offers, data related to shipping, past performance of sellers and other consumer complaints about products, including activated warranties.
Preliminary findings of the European Commission show that “employees of Amazon’s retail business have large amounts of data from non-public sellers and it flows directly into the automated systems of that business, which aggregates this data and uses it to calibrate the retail offers. of Amazon and strategic business decisions. to the detriment of other sellers in the market. ”
For example, Brussels explains, “it allows Amazon to focus its offers on the best-selling products in all product categories and adjust its offers in view of non-public data from competing sellers.”
The preliminary opinion of the European Commission is that the use of data from non-public market sellers “allows Amazon to avoid the normal risks of retail competition and to take advantage of its dominance in the market for the provision of market services in France and Germany: the largest markets for Amazon in the EU. If confirmed, this would violate Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position in the market. ”
‘Buy Box’ and ‘prime label’
In addition, the European Commission has opened a second antitrust investigation into Amazon’s business practices that could artificially favor its own retail offerings and offers from market sellers using Amazon’s logistics and delivery services (the so-called “compliance by from Amazon or FBA sellers “).
In particular, the European Commission “will investigate whether the criteria established by Amazon to select the winner of the Buy Box and to allow sellers to offer products to Prime users, under Amazon’s Prime loyalty program, they result in preferential treatment from Amazon’s retail business or from sellers using Amazon’s fulfillment and delivery services.
The Buy Box is prominently displayed on Amazon websites and allows customers to add items from a specific retailer directly to their shopping carts. Win the Buy Box, that is, being chosen as the offer that appears in this box, is essential for sellers of the market, Since the Buy Box prominently displays a single seller’s bid for a chosen product in Amazon marketplaces and generates the vast majority of all sales.
The other aspect of the investigation focuses on the possibility that sellers of the market effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continually growing and because they tend to generate more sales in Amazon marketplaces than non-Prime users.
If proven, the investigated practice may violate Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position in the market.