After launching a formal anti-trust probe against Amazon a year ago, the European Union’s Competition Commission is now ready to bring charges against the e-commerce giant over its treatment of third-party sellers, The Wall Street Journal reported.The charges could come as early as next week or the week, said the report on Thursday, citing sources familiar with the case.Amazon and the...
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After launching a formal anti-trust probe against Amazon a year ago, the European Union’s Competition Commission is now ready to bring charges against the e-commerce giant over its treatment of third-party sellers, The Wall Street Journal reported.
The charges could come as early as next week or the week, said the report on Thursday, citing sources familiar with the case.
Amazon and the European Commission did not confirm the dates of filing the charges, as per the report.
The European Commission announced the antitrust investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of EU competition rules.
“European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices,” EU Competition Commissioner Margrethe Vestager had said in a statement last year while announcing the probe.
“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 that Amazon has a dual role as a platform – it sells products on its website as a retailer and it 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. Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace, the Commission said based on its preliminary fact-finding.
Vestager launched a preliminary probe into Amazon in 2018, according to a report in CNBC.
As part of its in-depth investigation the Commission decided to 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 decided to focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
For antitrust violations, the EU competition commissioner can slap fines up to 10% of a company’s annual revenue.
The US-based tech giants have faced strict anti-competition scrutiny in the EU in recent years. Google parent company Alphabet was slapped with more than $9 billion in fines by the Competition Commission over a series of cases, said the CNBC report. However, business practices of the big tech companies have also attracted scrutiny from regulators in the US.