Tuesday 10 November 2020 12:09 pm

EU accuses Amazon of ‘distorting’ competition in ecommerce market

The EU has accused Amazon of distorting competition in online retail markets by misusing data from third-party sellers on its platform.

In a statement today, competition tsar Margrethe Vestager said Amazon “systematically” relied on non-public business data of traders on its site.

She accused the tech firm of using this data to benefit its own retail business, which directly competes against third-party merchants.

“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 accusations, which were made in a statement of objections by the European Commission, are centred on Amazon’s dual role as a marketplace and retailer.

Regulators said the company’s access to data meant it could benefit its own business, such as by focusing its offers in best-selling products and adjusting offers based on its knowledge of how rival sellers were performing.

The Commission’s accusations relate to France and Germany — the largest markets for Amazon in the EU.

If confirmed, the claims will represent a breach of EU regulations that prohibit the abuse of a dominant market position.

The competition regulators also opened a second formal antitrust investigation into the possible preferential treatment of Amazon’s own retail offers, as well as those that use Amazon’s logistics and delivery services.

The probe will focus on the site’s so-called Buy Box, which allows customers to add items from a specific retailer directly into their shopping carts, and its use of the Prime label for third-party sellers.

“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts,” an Amazon spokesperson said.

“Amazon represents less than one per cent of the global retail market, and there are larger retailers in every country in which we operate. No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”

The latest probe comes amid a wider crackdown on tech giants led by Vestager, who has earned a reputation as a fearless enforcer against Silicon Valley behemoths.

The competition chief last month said tech firms will be banned from unfairly promoting their own services under new EU rules set to be outlined before the end of the year.

Amazon is already under scrutiny from regulators in Germany over its relationship with third-party sellers on its site.

In August the head of the country’s Federal Cartel Office said it was investigating whether and how the company influenced how traders set prices on the platform.

Equally, Amazon is facing a string of probes in the US over its potential monopoly power over third-party merchants.