The European Commission says Amazon is violating competition rules and in that way enriches its own company. According to Competition Commissioner Margrethe Vestager, the American giant has been guilty of using confidential sales data from other retailers who use Amazon as a platform.
According to the committee, this concerns data such as the number of products sold, the turnover that is achieved with this and how often the offers from retailers have been viewed. The committee said in a press statement that using non-public data Amazon “circumvents the risks of competing with other stores.”
With this step, the European Commission is formally suing the company. Amazon now has the opportunity to defend itself. The committee can then decide to impose a fine or demand changes.
A dual role
Anyone who orders products via the Amazon webshop can do this via Amazon itself, but also via other retailers who use the platform as a trading point. This allows them to potentially attract more customers than, for example, through their own web store. This ensures that the American webshop giant has a dual role.
“We need to ensure that dual platforms with market power, such as Amazon, do not hinder competition,” said EU Commissioner Vestager in a statement. “Data from retailers should not be used in favor of Amazon if it is a competitor of these parties. The charge relates to the German and French Amazon websites.
In a response to Reuters news agency, Amazon said it “disagrees with the charges”. The company claims to control 1 percent of the global retail market.
The Dutch trade association of web shops, Thuiswinkel.org, says in a response that it recognizes the problem. “A level playing field is very important. If platforms don’t offer that, that’s not a good thing,” says director Wijnand Jongen. At the same time, Jongen is not aware of any Dutch web shops that have complained to the European Commission.
Research into favoritism
In addition to these charges, this European Commission has opened a new investigation into whether Amazon is favoring its own offerings and the offerings of retailers using the merchant’s logistics services.
At Amazon, multiple parties can offer the same product, one of which is linked to the buy button ‘Add to cart’. The committee wants to know which criteria are associated with this and whether Amazon is favoring retailers in this regard. They will also look at how retailers can reach customers with the so-called Prime subscription (who usually buy more from Amazon).
Today’s so-called statement of objection follows after Brussels announced last year that it would start the case. The German competition authority opened an investigation into Amazon in August. This focuses on the question to what extent the multi-billion company interferes with the pricing policy of retailers who sell via Amazon.
Big tech under magnifying glass
Amazon is the third tech giant in a few years that the European Commission is targeting. Under the leadership of European Commissioner Vestager, three fines have already been handed out to Google for more than 8 billion euros; the company has appealed all three. Earlier this year, the committee also started an investigation into alleged abuse of power by Apple in the App Storen and at the payment service Apple Pay.