European Commission launches antitrust investigation into Amazon

The European Commission (EC) has launched an official antitrust investigation into Amazon’s use of data from independent retailers using its marketplace.

Laws outlined in the Treaty on the Functioning of the European Union (TFEU) prohibit the restriction of competition in the EU Single Market, as well as “abuse of a dominant position”.

The European Commission has launched its investigation to assess whether Amazon is breaching EU competition rules by collecting or using data about sellers on its marketplace platform.

Margrethe Vestager, who is commissioner 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.”

In the 12 months leading up to August 2015, UK-based Amazon Marketplace merchants saw 400 million product orders, and more than two billion items were ordered from third-party businesses through the marketplace worldwide. The platform is a popular place for smaller merchants to offer their products.

As the popularity of online shopping grows, so does consumer expectation for services such as click-and-collect or same/next day delivery – services Amazon is increasingly offering across several market segments through Amazon Prime and Amazon Lockers, among other things.

Recent research by Wunderman Thompson Commerce found that around 36% of all online retail sales internationally come from Amazon, and more than half of consumers will search for products on Amazon as their first port of call – a customer base Amazon’s marketplace sellers are able to tap into by appearing on the platform.

According to the commission, Amazon has two roles – to sell products as a retailer and to provide a marketplace for other smaller retailers to sell products direct-to-customer. But while it provides this marketplace, it also collects data about the activity across its platform.  

An initial fact-finding session by theEC found that the data Amazon collects and uses includes data about marketplace sellers, covering products and transactions, which the commission labelled “competitively sensitive information”.  

The EC will use its investigation to look into agreements between marketplace sellers and Amazon, including how data collected about marketplace sellers is used and whether this will impact market competition.

It will also look into whether Amazon uses competitively sensitive marketplace data it has collected to select whether or not marketplace sellers have a Buy Box on their products, allowing consumers to add items directly to their basket – the commission argued this feature “seems key for marketplace sellers as a vast majority of transactions are done through it”.

A statement from Amazon said: “We will co-operate fully with the European Commission and continue to work hard to support businesses of all sizes and to help them grow.”