Does Amazon, the world’s largest online retailer, use unfair practices to remain ahead of the smaller sellers on the marketplace platform? Today the EU’s Competition Commission opened a formal investigation into possible anti-competitive conduct of Amazon.
The goal of the investigation is to establish whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.
This is the second big hit Amazon has taken in a matter of days. Yesterday employees of the company in Germany and Minnesota rallied to protest against low pay and poor working conditions.
One of the questions being investigated is: Is the e-commerce giant using merchant data to gain a competitive advantage? European Commissioner Margrethe Vestager believes that due to an increase in online shopping, e-commerce has boosted competition, bringing better prices and more choices.
“We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior,” said Vestager. “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.”
The probe may eventually lead to formal charges and orders to change business practices and fines. It could also be dropped.
The company owned by Jeff Bezos released an official statement, responding to the news: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
Amazon did, however, update their service agreement today. It’s still uncertain how this will affect the European Commission’s investigation.
Margrethe Vestager has been involved in the Amazon case since last September when a preliminary look at the e-commerce giant’s data collection practices was taken. During her five year tenure as the Competition Commissioner on the European Commission, she became known for fining most of the major tech giants, including Google, Facebook, and Apple.
A ruling by Vestager lead to Apple being forced to pay back a staggering $15.4 billion in taxes. So far, Amazon has avoided being fined, but only the European Commission can determine whether that will remain as it is.