EU accuses Amazon of breaching competition rules

The European Union has accused e-commerce giant Amazon of breaching competition rules by using the data it collects from third-party sellers on its own platform to compete against them, the Commission’s competition chief Margrethe Vestager announced on Tuesday.

The US tech giant is set to face antitrust charges from the EU Executive for misusing the data from independent merchants to gain an advantage in European marketplaces, and in particular, in France and Germany, the biggest markets for Amazon in the EU.

“More than 70% of consumers in France, and more than 80% of consumers in Germany, that made online purchases bought something from Amazon in the last 12 months,” Vestager told a press conference in Brussels, adding that the EU did not have an issue with the size of the e-commerce giant, but with its business practices that are breaching the bloc’s competition rules.

The antitrust accusations are the outcome of a case that was opened last year and that focuses on Amazon’s dual role as both a marketplace for third-party sellers and a competitor, selling its own goods.

“We reached the preliminary conclusion that amazon illegally has abused its dominant position as a marketplace service provider in Germany and France,” Vestager wrote in a Twitter post. She added that Amazon “may have used sensitive data big scale to compete against smaller retailers,” and that it’s the tech giant’s time to respond.

In a Statement of Objections sent to the e-commerce giant, the Commission’s preliminary view reads that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in the two countries.

Brussels have also decided to launch a second probe into Amazon’s e-commerce business practices, over its own retail offers and offers of marketplace sellers that use Amazon’s logistics and delivery services. In particular, the investigation will look into how Amazon decides which merchant to link to using its “Buy Box” and how marketplace sellers reach “Prime” users.

“Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair.  Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services,” Vestager added.

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