Antitrust Law Daily EC accuses Amazon of breaching EU antitrust rules and opens second investigation
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Tuesday, November 10, 2020

EC accuses Amazon of breaching EU antitrust rules and opens second investigation

By Sheri A. Wattles-Miller, J.D.

The European Commission’s preliminary view is that the giant retailer distorted competition in online retail markets.

The European Commission (EC) announced today its preliminary view that Amazon breached EU antitrust rules by distorting competition in online retail markets. The Commission specifically objects to Amazon relying on nonpublic 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. The EC 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. The new investigation follows the July 2019 opening of another formal antitrust investigation into the retailer’s use of sensitive data from independent retailers who sell on its marketplace.

Amazon’s use of marketplace seller data. The EC's preliminary view, which is outlined in the Statement of Objections, is that the use of nonpublic marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market, particularly in France and Germany, the biggest markets for Amazon in the EU. The Commission explained that Amazon has a dual role as a platform: (1) it provides a marketplace where independent sellers can sell products directly to consumers; and (2) it sells products as a retailer on the same marketplace, in competition with those sellers. The Commission's preliminary findings showed, because of this dual role, large quantities of nonpublic seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business. This data includes 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.

Investigation into Amazon e-commerce business practices. The EC opened a second antitrust investigation into Amazon's use of retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services. In July 2019 the EC announced the opening of a formal antitrust investigation to assess whether the company’s use of sensitive data from independent retailers who sell on its marketplace is in breach of European Union (EU) competition rules.

The Commission will investigate whether the criteria that Amazon sets to select the winner of the "Buy Box" incentive leads to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services. The "Buy Box" is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. The investigation will focus on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.

Companies: Amazon Inc.

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