The European Commission has opened a formal antitrust investigation into whether Amazon's use of sensitive data from the independent retailers that sell on its marketplace is in breach of EU competition rules.
Amazon sells products as a retailer but also provides a marketplace for independent retailers to sell, too. But when providing a marketplace, Amazon continuously collects data about the activity on its platform and the Commission said that, based on its "preliminary fact-finding", Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace.
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Margrethe Vestager, the Commissioner in charge of competition policy, said that European consumers are increasingly shopping online, and that ecommerce 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," she said.
The EC said its in-depth investigation will look into the standard agreements between Amazon and marketplace sellers, which allow Amazon's retail business to analyse and use third-party seller data, and whether the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
It also wants to look into the role of data in the selection of the winners of the "Buy Box" displayed prominently on Amazon, and the impact of Amazon's potential use of competitively sensitive marketplace seller information on that selection.
Winning the "Buy Box" seems key for marketplace sellers as a vast majority of transactions are done through it.
The EC said that, if proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies and/or on the abuse of a dominant position.
The EC said it will carry out its in-depth investigation as a matter of priority, but noted the opening of a formal investigation does not prejudge its outcome and that there is no legal deadline for bringing an antitrust investigation to an end.
Amazon said in a statement: "We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow."