Vulcan Insight

European Commission launch investigation into Amazon

19 July 2019

The European Commission announced that it has opened a formal investigation into Amazon over whether the tech giant is using sales data to gain an unfair advantage over smaller sellers on the Marketplace platform. Commissioner for Competition Policy, Margrethe Vestager noted that, through online shopping is increasing, “E-commerce has boosted retail competition and brought more choice and better prices” and therefore she’s taking a “very close look at Amazon’s business practices…”

The EU will examine the agreements between the U.S. company and its sellers, which allows Amazon’s retail business to analyse and use third-party seller data. It will also look into the role of data in the selection of the “Buy Box” on Amazon’s search results, underlining regulators’ increasing focus on how tech companies exploit customer information. Should it be proven that Amazon did indeed breach EU competition rules, they could be fined up to 10% of its annual revenue. Amazon said it would cooperate fully with the EU.

Amazon has been the subject of previous EU investigations when it was ordered to pay $295 million back in taxes to Luxembourg after that the company profited from a tax avoidance deal. The US House Judiciary Committee has been investigating the market power of Facebook, Google, Amazon and Apple and how they use data to boost their market power.

In a parallel case, Germany’s antitrust authority had been investigating the company for seven months until it reached a deal on Wednesday July 17 to overhaul its Business Solutions Agreement to third-party sellers. Other EU countries including Austria, Italy and Luxembourg are also independently investigating Amazon’s business practices.

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