1. News
September 21, 2018

European Commission concerned over Amazon’s data use

The European Commission has questioned how Amazon uses its data on third-party sellers and whether it uses this data for its own unfair advantage.

By Pamela Kokoszka

The European Commission has questioned how Amazon uses its data on third-party sellers and whether it uses this data for its own unfair advantage.

The commission has concerns over whether Amazon ’s role as a platform that merchants can use to sell their products while also being a competitor to these same merchants raises antitrust concerns, but it stresses it’s  ‘early days’ and they ‘haven’t formally opened a case’.

The retailer’s marketplace lists the products of third-party sellers on its websites, alongside the company’s own items.

According to company figures, more than half of all global businesses sell their products on Amazon ’s marketplace and European businesses used the service to export over €5 billion worth of goods last year.

Amazon earns revenues for the services it provides but the company also benefits because the third-party sellers increase the selection and range of products available on Amazon ’s websites. In exchange independent sellers can expand their reach and start selling online with limited initial investment.

European competition commissioner Margrethe Vestager said: “The question here is about the data, because if you as Amazon get the data from the smaller merchants that you host — which can be of course completely legitimate because you can improve your service to these smaller merchants — well, do you then also use this data to do your own calculations? What is the new big thing, what is it that people want, what kind of offers do they like to receive, what makes them buy things.”

“We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full,” Says Vestager.

The deadline for the sellers to return the questionnaires has been set to 9 October, after which the EU officials will determine their next steps, if any.

Companies found to be in breach of EU antitrust rules can be fined up to 10% of their global annual turnover.

According to Vestager, the action was not prompted by a complaint, but instead initiated based on the commission’s own market observation and the results of its e-commerce sector inquiry completed in 2017.

Over the past five years, Vestager has gained a reputation for fighting major tech companies.

Last year, Google was hit with a €2.4bn antitrust fine for abusing its market dominance, and Apple was forced to repay €13bn in back taxes.

The potential conflict arising from the Amazon ’s dual role as a selling platform and retailer has also faced questions in the US, where it was the focus of a widely circulated legal paper.

The Federal Trade Commission, a US competition regulator, has launched a review of its approach to antitrust enforcement, prompted in part by those concerns.