The European Union has filed antitrust charges against online giants Amazon, accusing the online retailer of using business data to gain an unfair advantage over merchants operating on its platform.
The charges follow a two-year investigation into Amazon’s dual role as a marketplace as well as a vendor, competing with other companies that are also using its platform.
Amazon is the latest company to be tackled by the EU’s competition commissioner, Margrethe Vestager, whose office has also fined Google more than €8bn (£7.1bn) over competition issues, and ordered Apple to repay €13bn (£11.5bn) in taxes to the Irish government. Both companies have appealed those decisions.
Ms Vestager announced that the charges had been sent to the company on 10th November.
The competition commissioner explained that the European Commission believed Amazon has broken antitrust rules by distorting competition in online retail markets.
Specifically, it alleged that Amazon’s systematically relied on data it collected on independent companies because it provided the marketplace for them and used the information to benefit its own retail business.
This data included “the number of ordered and shipped units of products, the sellers’ revenues on the marketplace, the number of visits to sellers’ offers, data relating to shipping, to sellers’ past performance, and other consumer claims on products, including the activated guarantees”.
According to the EU’s initial findings, “very large quantities of non-public seller data are available to employees of Amazon’s retail business,” rather than this data being kept within the marketplace division.
This data flows “directly into the automated systems of that (retail) business, which aggregate these data and use them to calibrate Amazon’s retail offers and strategic business decisions to be detriment of the other marketplace sellers.”
“For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers,” the statement added.
The EU also announced the opening of “a second formal antitrust investigations into the possible preferential treatment of Amazon’s own retail offers and those of marketplace sellers that use Amazon’s logistics and delivery services.”
It will also look into the Amazon’s “buy box” function, which offers customers a one-click button to add a product to their shopping cart. U.S. regulators and third-party sellers have previously questioned Amazon over which products get placed in the all-important buy box. Amazon maintains that the buy box features the offer it thinks customers will prefer overall, while factoring in things like price, delivery speed and Prime.
Additionally in a statement, the online retail company responded saying, “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.”
The charges follow a US congressional report that accused Amazon, Apple, Facebook and Google of monopolising the digital market, and recommended antitrust laws be used to break up these companies.