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July 22, 2019
On 17 July 2019, the European Commission announced that it 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.
As a platform Amazon has a dual role: (i) it sells products on its website as a retailer; and (ii) it provides a marketplace where independent sellers can sell products directly to consumers.
When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. The Commission is concerned that Amazon is using competitively sensitive information about marketplace sellers, their products and transactions on the marketplace.
The Commission has indicted that it intends to investigate further:
- 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; and
- The role of data in the selection of the winners of the “Buy Box” (which is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts) and the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. According to the Commission, winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.
Announcing the investigation, EU Commissioner for Competition, Margrethe Vestager, observed that European consumers are increasingly shopping online and that e-commerce has boosted retail competition and brought more choice and better prices. Commissioner Vestager indicated that the “need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour”, had led to the decision “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.” To read the Commission’s announcement in full, click here.
News of Commission’s formal investigation came as the German and Austrian competition authorities announced that they were ending their respective probes into Amazon on the basis that it has agreed to amend certain terms applied globally to retailers who sell products on its platform from 16 August 2019. These changes are expected to bring “far-reaching improvements in the terms of business for sellers on Amazon’s online marketplaces”. For further information on the amendments to Amazon’s T&Cs, and to read the announcements in full, click here and here.