The European Commission has opened an antitrust investigation into whether Amazon is using data from independent sellers on its platform for competitive advantage.
A statement from the Commission pointed to Amazon’s dual—and perhaps conflicting—roles as a retailer of products and as a marketplace where other merchants also sell goods.
“When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform,” the Commission said in its announcement. “Based on the Commission’s preliminary fact-finding, Amazon appears to use competitively sensitive information—about marketplace sellers, their products and transactions on the marketplace.”
The Commission said it will carry out a thorough investigation “as a matter of priority.”
It plans to investigate the standard agreements between Amazon and its marketplace sellers, which give Amazon access to third party data—and, in particular, how Amazon’s use of this data impacts competition between them.
The Commission will also investigate how sellers get Buy Boxes, which are the prominently displayed tabs that allow customers to add items directly to their carts, and how data is involved in the selection as “winning the Buy Box seems key for marketplace sellers as a vast majority of transactions are done through it.”
“Ecommerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior,” said Commissioner Margrethe Vestager in a statement. “I have therefore decided 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.”
If proven, the practices may breach Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits anticompetitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market; and Articles 102 TFEU, which prohibits the abuse of a dominant position.
The Commission said it informed Amazon and the competition authorities of the Member States that it has opened proceedings in this case.
The release also noted there is no legal deadline for an antitrust investigation—the duration depends on factors like “the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.”
In a statement, Amazon said, “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”