EU Commission: Amazon is playing against the rules

Does Amazon use data on its platform to kick off third-party providers and gain advantages? The EU competition watchdog answered the question after an initial investigation with a resounding yes. The company disagrees.

EU Competition Commissioner Margrethe Vestager in Brussels on Tuesday

Dhe world’s largest online retailer, Amazon, is violating competition rules, according to the EU. The company is accused of systematically using non-public business data from independent retailers for its own retail business, said Competition Commissioner Margrethe Vestager on Tuesday. The tightening of the tone against Amazon was expected according to FAZ information in Brussels.

According to the authority, Amazon now has the opportunity to comment on the objections. If the competition watchdogs then stick to their assessment, Amazon could face a billion-dollar fine. If companies violate EU competition rules, they risk fines of up to ten percent of their annual global sales. Amazon’s 2019 revenue was approximately $ 280.5 billion.

Amazon rejected the EU authority’s allegations. “We disagree with the European Commission’s preliminary assumptions and will continue to do our best to ensure that it is correct. Amazon accounts for less than 1 percent of global retail – and there are larger retailers in every country in which we operate, ”an Amazon spokeswoman told FAZ Years have done more to support them than Amazon has. “There are more than 150,000 European dealers who sell in our stores. They generate tens of billions of euros in sales annually and have created hundreds of thousands of jobs, ”the spokeswoman continued.

Strategy based on third-party offers

The EU’s competition watchdogs launched an investigation into potentially illegal business practices in July 2019. Above all, they are looking into the question of whether the group is competing unfairly with other retailers who use its platform. This is possible because Amazon not only sells goods itself as a retailer, but also makes its website available as a platform for other retailers.

Regarding the objections, the EU Commission now writes that the results of the investigation showed that the employees of the Amazon retail store had very large amounts of non-public seller data at their disposal, which flow directly into the automated systems of the store, where they were aggregated and used to balance end customer offers and strategic business decisions from Amazon. This is to the detriment of the other sellers on the marketplace. Amazon could, for example, concentrate its offers on those products in a category that sell best.

“Amazon should not use data on the activity of independent sellers to its own advantage when the company is competing with those sellers,” Vestager said. The competitive conditions on the Amazon platform must be fair.