April 1, 2023

The Queens County Citizen

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The EU has hit Amazon with antitrust allegations. A huge fine can follow.

The EU has hit Amazon with antitrust allegations.  A huge fine can follow.

Margaret Vester, a top European Commission antitrust official, on Tuesday accused Amazon of illegally abusing its dominance as an online marketplace in Germany and France, the EU’s largest markets.

The commission has launched an official investigation Amazon (AMZN) In July 2019 To examine its dual role in the market and retail. It’s It is examining deals between Amazon and independent retailers and whether the e-commerce giant is unfairly using data from sellers to sell its own products.

An investigation has revealed that Amazon feeds non-public sellers data such as the number of products ordered and sellers earnings in public retail algorithms to help determine what new products to launch and the price of each new offer.

This allows Amazon to intercept third-party vendors and limit “their growing potential”.

Amazon took issue with the findings. “We disagree with the European Commission ‘s initial arguments and will continue to make every effort to ensure that we have a clear understanding of the facts,” the company said in a statement.

According to Wester, more than 70% of online shoppers in France and more than 80% in Germany have bought something on Amazon in the last 12 months. “We don’t take issue with Amazon success or its size, our concern is unique business behavior that distorts competition,” she says.

The commission said Amazon had violated EU antitrust regulations, but that its primary view was to complete its investigation before imposing fines. This research can take years and Amazon can be fined up to 10% of its annual global sales. This represents a maximum of $ 37 billion in fines based on the company’s estimate for revenue this year.

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EU Antitrust officials have launched a second investigation into whether Amazon artificially prefers its own retail offers or market sellers using the company’s logistics and delivery services. The focus will be on the criteria Amazon uses to select products in its popular “Buy Box”.

“Our concern is that Amazon may artificially push retailers to use its own related services, which will lock deeper into Amazon’s ecosystem,” Vestager said.

How big tech companies use data and how they deal with their smaller rivals has become a major focus for regulators on both sides of the Atlantic. U.S. Department of Justice last month Google has been accused of stifling competition To maintain its powerful position in the market for online search and search advertising.
The European Union has become a key battleground for tech due to its strict regulations on data protection, hate speech, taxation and competition issues. EU officials have a track record of beating US tech companies such as Google (GOOGL) With a fine worth billions and Amazon could experience the same fate.