NEWS19 July 2019

European Commission investigates Amazon

Europe Legal News Retail

EUROPE – The European Commission has started a formal anti-trust investigation into whether Amazon has breached the EU’s competition rules.

Amazon logo on smartphone

The issue lies in how Amazon has used sensitive data from independent retailers who sell on its marketplace.

Amazon has a dual role as a platform because it sells products on its website as a retailer and provides a marketplace where independent sellers can sell products directly to consumers.

When offering a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on the Commission’s preliminary fact-finding, it said Amazon appears to use competitively sensitive information – about sellers, their products and transactions on the marketplace.

The Commission investigation will look into: the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third party seller data and the role of data in selecting the winners of the ‘Buy Box' and the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection.

The ‘Buy Box’ is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the ‘Buy Box’ seems key for marketplace sellers as a vast majority of transactions are done through it.

Commissioner Margrethe Vestager, in charge of competition policy, said: "E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don't eliminate these benefits through anti-competitive behaviour. 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 EU competition rules."

If proven, the practices being investigated may breach EU competition rules on anti-competitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).