Online retail giant Amazon is set to face an EU competition investigation, it is the latest multinational company to be subject to an anti-trust inquiry following allegations it misuses “sensitive data”.
The European Commissioner for Competition (ECC) has launched a formal investigation to ascertain if the online retailer is abusing its market power through the use of its vendors’ data to gain a competitive advantage.
Competition commissioner, Margrethe Vestager, who is leading the investigation, said the inquiry will focus on Amazon’s standard agreements with marketplace vendors and how data is used to allot prominent slots on its site. Independent sellers claim their business has been harmed by Amazon copies of their goods.
Vestager, who is responsible for a number of EU investigations of US tech giants, said: “E-commerce 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.”
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Amazon said it “will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
The ECC’s announcement follows swiftly after Amazon announced a new deal with German regulators to change its service agreement with third-party merchants. As part of its practice overhaul, Amazon agreed to provide 30 days notice and a reason before removing sellers from its platform.
Under the new agreement, sellers will now be able to take legal action against the company in their home countries, rather than being forced to do so in Luxembourg. In return for the reforms, due to take effect in 30 days, the German regulators dropped their inquiry into the company’s practices. It is unclear how these changes will impact on the ECC’s investigation.
The outcome of this investigation could see the company fined for the first time by EU regulators. Last month, the UK’s Competition and Markets Authority served Amazon with an initial enforcement order putting its deal with food delivery business Deliveroo on holdover concerns it breached competition rules.