The E.U. has launched an antitrust investigation of e-commerce giant Amazon which could see the company fined as much as $23 billion.
Business Insider reports that that the European Union’s commissioner Margrethe Vestager has announced a formal investigation into e-commerce giant Amazon over the use of data from independent retailers that sell on Amazon’s marketplace, questioning if the data use is in breach of the E.U.’s competition rules. If Amazon is found to have breached E.U. laws it could face a fine of as much as $23 billion.
Vestager stated that she would be taking a “very close look” at Amazon’s “dual role,” as both a merchant and a seller. “We need to ensure that large online platforms don’t eliminate these benefits through anticompetitive behavior,” she said. “I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with E.U. competition rules.”
Amazon told Business Insider in a statement that the company plans to “cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.” Vestager’s investigation team began working on the initial stages of the Amazon investigation last year; the European Commission said in a statement: “Amazon appears to use competitively sensitive information — about marketplace sellers, their products, and transactions on the marketplace. The Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.”
Business Insider reports that the investigation will focus on:
- The agreements between Amazon and its marketplace sellers allowing Amazon to analyze and use third-party seller data and specifically whether Amazon’s use of this data affects competition.
- How Amazon selects retailers for its “Buy Box” feature — the “add to cart” button that allows customers to directly add an item to their shopping cart. “Winning” the Buy Box is key for marketplace sellers, the commission said, as the majority of transactions are done through this.
Amazon’s use of third-party merchant’s data has been a contentious issue for some time; an Amazon executive told the House Judiciary subcommittee on antitrust this week that the company does not use data from third-party merchants when determining which new products to create. The FTC has also reportedly begun questioning Amazon’s rivals about the company business practices including how third-party sellers compete with the e-commerce giant.