Just days after Amazon opened a 215,000-square-foot cargo facility at an airport in Germany, the European Commission said it appears the ecommerce platform has breached EU antitrust rules by “distorting competition in online retail markets.”
It’s an issue we’ve heard about before—the Commission launched a similar investigation in July 2019. Now, it says Amazon is still “systematically relying on non-public business data of independent sellers who sell on its marketplace,” which it then uses to benefit its own retail business as it competes with those sellers.
The Commission opened a second formal investigation into preferential treatment of both Amazon itself as a first-party seller, and the third-party sellers who use its logistics and delivery services. In an announcement from Brussels on Tuesday, the Commission said Amazon has access to third-party seller data, including orders, shipments, revenue and site visitors.
Preliminary findings indicate “very large quantities” of seller data are not only accessible to Amazon employees, but the platform uses this data to better compete with them, the Commission added. Officials cited some examples of Amazon’s alleged violations, such as zeroing in on best-selling products and adjusting its own offers so it is more likely to win the sale. This, the Commission said, helps Amazon “avoid the normal risks of retail competition and to leverage its dominance” in France and Germany, its two biggest EU markets.
Separately, the Commission opened another antitrust investigation into whether Amazon favors itself and the third-party sellers who use its logistics program, Fulfillment by Amazon (FBA). That includes how Amazon decides which listings get the coveted buy box, which “prominently shows the offer of one single seller for a chosen product on Amazon’s marketplaces and generates the vast majority of all sales.”
A spokesperson for the Commission did not respond to a request for comment.
As for Amazon, the ecommerce giant issued a statement regarding the Commission’s charges: “We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts. Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate. No company cares more about small businesses or has done more to support them over the past two decades than Amazon. There are more than 150,000 European businesses selling through our stores that generate tens of billions of Euros in revenues annually and have created hundreds of thousands of jobs.”
Amazon’s practices regarding its role as a first-party seller alongside third-party retailers on its platform has been a point of contention in the US, too. In fact, when Amazon CEO Jeff Bezos testified during the House Judiciary Committee’s antitrust hearing this summer, he conceded Amazon perhaps favors products shipped with Prime—even though the platform previously said FBA enrollment was not a factor in winning the buy box.
“I’m not sure if it’s direct, but, indirectly, I think the buy box does favor products that can be shipped with Prime,” Bezos said during his testimony, noting the buy box is “trying to pick the offer that we predict the customer would most like that includes price, delivery speed and, if you’re a Prime member, includes whether the item is eligible for Prime.”
The European investigation is the merely latest chapter in Amazon’s ongoing antitrust saga at home and abroad. In September 2019, for example, the Federal Trade Commission reportedly began interviewing third-party sellers about whether Amazon was using its market power anti-competitively. It later extended this investigation to include Amazon Web Services.