Amazon Latest In EU Regulatory Spotlight With Commission Data Probe

Amazon is wohe latest company to be targeted for scrutiny by European regulators, with the European  Commission’s decision to launch a preliminary investigation into the company’s use of data on its third-party sellers.

The decision follows an earlier lawsuit over similar issues by French authorities, and arrives in a context of increasingly aggressive Commission competition action against overseas tech giants.

Unusually, the probe announced by EU competition commissioner Margrethe Vestager was not in response to a complaint by a competitor.

It resulted instead from the Commission’s own market observations and an e-commerce sector inquiry completed last year, Vestager said.

Image credit: European Commission

Market power

Informal probes do not always result in charges, but Google’s antitrust entanglements with the EU began with such a procedure in 2010.

Vestager said the inquiry would look into how Amazon uses data from the sellers on its platform and whether it could use the information to fuel its own retail sales.

At issue, she said, is a potential conflict between the company’s roles in hosting third-party sellers while at the same time competing with them.

France’s economy minister, Bruno Le Maire, named similar issues in a lawsuit he filed in December of last year in Paris, saying the e-commerce giant abused its dominant position to impose “unfair” conditions on third-party sellers.

Le Maire demanded a record fine of €10 million (£8.8m) in his complaint with the Paris Commercial Tribunal, which followed a two-year probe by the consumer regulator DGCCRF.

At a press conference last week outlining the EU’s action,  Vestager said it was “early days” and that no formal case had been launched.

Her office has sent questionnaires to merchants and other parties involved in the probe.

She said Amazon’s use of data was central to the investigation.

“We have no conclusions,” she said. “We are trying to make sure that we get the full picture.”

The questionnaires are to be returned in the next two months, Vestager said.

Amazon declined to comment.

Regulatory action

Vestager is nearing the end of a five-year term that has seen her levy a record 4.3bn euro (£3.86bn) fine on Google in July and force Apple to pay Ireland 13bn euros in back taxes after finding the country had illegally reduced Apple’s tax bill.

Regulators have taken aim at the app stores run by Google and Apple, while companies including Intel and Microsoft have also been subjected to large EU fines in recent years.

Amazon has raised regulatory concerns due to its ever-growing market power, as it has expanded into areas including grocery stores, advertising and healthcare.

Sales by third parties exceeded half of the items sold over the platform for the first time last year.

European businesses exported more than 5bn euros over Amazon in 2017.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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