European Commission launches antitrust investigation into Amazon marketplace practices

European Commission launches antitrust investigation into Amazon marketplace practices

The European Commission has announced the opening of a formal antitrust investigation into Amazon over its use of sensitive data from independent retailers who sell on its marketplace.

The investigation will consider whether Amazon collects competitively-sensitive information about marketplace sellers, their products and transactions on the marketplace in breach of EU competition rules.

Commissioner Margrethe Vestager, in charge of competition policy, said: “European consumers are increasingly shopping online. 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.”

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

When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. The Commission said its preliminary fact-finding had indicated that Amazon appears to collect competitively-sensitive information.

As part of its in-depth investigation, the Commission 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. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
  • The role of data in the selection of 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.

If proven, the practices under investigation may breach EU competition rules on anticompetitive 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), the Commission said.

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