European Commission Launches Antitrust Action Against Amazon

The European Commission has formed a preliminary view that Amazon has breached Article 102 of the Treaty on the Functioning of the European Union by distorting competition in online retail markets. It announced on November 10 that it had sent a Statement of Objections to the e-commerce company.

Article 102 (formerly Article 82 TEC) prohibits “any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it.” Amazon is said to be dominant in France and Germany, its biggest markets in the EU.

The Commission said that Amazon systematically relies on non-public business data of independent sellers on its marketplace to the benefit of its own competing retail business. This data includes the number of units of products ordered and shipped, sales revenues, and the number of online visits made to offers.

Its preliminary findings show that “very large quantities of non-public seller data” are available to Amazon’s employees and flow directly into the automated systems of its retail business in real time. This allows Amazon to focus its offers on the best-selling products and adjust its offers based on non-public data.

Second Investigation

The Commission has also opened a 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 (“Fulfilment by Amazon”). This focuses on the selection of sellers for the “Buy Box” and inclusion in the Prime loyalty program.

This investigation will be carried out as a matter of priority and covers the European Economic Area, apart from Italy, where a competition investigation is already underway.

What Happens Next

In a statement, Commission Executive Vice-President Margrethe Vestager, in charge of competition policy, said its aim was to ensure that dual-role platforms such as Amazon do not distort competition: “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.”

The Commission’s investigation started in July 2019 following complaints made by sellers, and included a data sample of more than 18 million transactions and 100 million products.

The Statement of Objections is a formal step in investigations of suspected violations of EU antitrust rules. It does not prejudge the outcome of an investigation. Amazon can now examine the relevant documents, reply and request an oral hearing.

Amazon faces a fine of up to 10% of its global turnover if it is found to have breached Article 102, and the Commission can also impose other remedies, such as the separation of the company’s businesses.

Amazon was reported as saying it disagreed with the findings, and would contest them. Any penalties imposed by the Commission can be appealed before the EU Court of Justice.

Details of the cases are available on the Commission’s competition website and case register:

• Case 40462: use of marketplace seller data
• Case 40703: investigation into Amazon’s business practices

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Author: alexeynovikov
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