European Executive Vice-President Margrethe Vestager gives a news conference on antitrust case with Amazon website at European Commission in Brussels, Belgium November 10, 2020. Olivier Hoslet/Pool via REUTERS

THE NEUTRAL ZONE

The European Commission filed an antitrust complaint against Amazon on Tuesday over how the company uses data from third-party sellers. EU antitrust regulator Margrethe Vestager alleged Amazon used its access to data to identify popular products sold by outside vendors on the platform. Vestager further claimed Amazon would then make and sell its own comparable products, sometimes at a lower price. The commission announced an additional formal investigation into how Amazon chooses which sellers offer products through Amazon Prime.

Through a 2-year investigation, an analysis of millions of transactions and product listings found that “very granular, real-time business data” was fed into algorithms that help to decide new products to sell as well as their price and supplier. Vestager said that while most retailers take risks when investing in finding and distributing new products, Amazon could avoid some of those risks by using harvested data for business decisions.

Amazon denied that allegation, vowing to work with the commission “to ensure it has an accurate understanding of the facts.” The company noted, “Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate.” Negotiations are expected, and Amazon could eventually challenge the case in an EU court. If the complaint is successful, Amazon could owe $28.1 billion, a fine equal to 10% of its revenue.

MEDIA PERSPECTIVE

Amazon hit with EU antitrust charges, new accusations of abusing dominance – CNET – 11/10/2020
Amazon is under fire in Europe. On Tuesday, European Competition Commissioner Margrethe Vestager announced formal antitrust charges against Amazon over how the tech giant uses data about merchants on its platform, as well as a brand new investigation into the retailer. Amazon has faced increasing scrutiny from regulators both in the EU and US, part of a broader backlash against Big Tech and the power that it wields. The company is under scrutiny in New York and in Congress for similar reasons.

Amazon’s use of marketplace data breaks competition law, EU charges – Ars Technica – 11/10/2020
As a platform, Amazon has access to proprietary data about all those other merchants’ online business, which it then gathers and uses anticompetitively to get a leg up in its own retail operations, the EU alleges. This is not just an infrequent or occasional lapse, the EC determined, finding instead that “very large quantities of non-public seller data” are available to Amazon and “flow directly into [Amazon’s] automated systems.” Amazon then allegedly uses that data to make its own determinations, “to the detriment of the other marketplace sellers.”

Amazon Hit With Multibillion-Dollar Antitrust Action in EU – Gizmodo – 11/10/2020
The commission, which represents the EU’s top antitrust regulator, said in a statement that its preliminary view is that Amazon’s marketplace collects voluminous data on the sales of third-party retailers and then uses that data to launch its own products and undercut its competition. […] This complaint is one of the most common charges against Amazon as an anti-competitive outfit, and it was one that Senator Elizabeth Warren focused on in her plan to break up big tech in the United States.

The EU just slapped Amazon with antitrust charges over its use of seller data – Fast Company – 11/10/2020
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.

INFLUENCER PERSPECTIVE

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