The European Commission has filed antitrust charges against Amazon for “distorting competition in online retail markets.” Specifically, the EC says Amazon is unfairly relying on third-party seller data of those who sell in its online Marketplace to better inform the company’s own retail strategies. Use of such data unfairly benefits Amazon, the EC says, which at the same time hosts one of the largest third-party platforms for sellers, while also competing against them on a number of fronts, including selling identical products or selling its own Amazon-branded competing products.
In a public statement on the antitrust charges, the EC noted, “The Commission’s preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon’s retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.”
Amazon has yet to publicly respond to the charges, yet they don’t come unexpectedly to the company. As Amazon’s dominance in online retail only continues to grow, the fact that it’s both a retailer and a retail platform for competitors has increasingly put them under the lens of government watchdogs across the world. Indeed, European Commission executive vice-president Margrethe Vestager said as much in her statement on the antitrust charges.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Vestager said. “Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favor Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services. 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.”
If Amazon is found to have breached antitrust laws, it could ultimately cost the company billions of dollars, while at the same time limiting the use of the marketplace data Amazon collects. However, given how lengthy antitrust battles can go on, it’s likely to be years before we know how this will play out.