The EU announced on Tuesday that it has filed antitrust charges against Amazon, alleging that it has “distort[ed] competition in online retail markets.”
The European Commission found that Amazon has a “dual role” in that it both provides a marketplace for third-party sellers to sell their goods online, and it also acts as a retailer in that same online marketplace, selling goods that compete with those of the third-party sellers. As the provider of the marketplace, Amazon has access to the third-party sellers’ business data, including such details as number of orders shipped, sellers’ revenues and number of consumers visiting sellers’ products pages. The Commission’s preliminary investigation showed that Amazon uses this non-public data to better position its own offers and products, to the detriment of the third-party sellers. This “allows Amazon to avoid the normal risks of retail competition and to leverage its dominance” in the online marketplace.
The Commission has also opened a second antitrust investigation into Amazon, this one focusing on the criteria Amazon uses to determine the winner of the “Buy Box” as well as looking at whether there is preferential treatment in which sellers are able to offer products to Amazon Prime users. The Buy Box prominently displays the selected product on Amazon’s websites, and allows users to directly add that product from that seller into their shopping cart. The investigation will look into whether Amazon’s criteria favor its own retail business and those of sellers who use Amazon’s fulfillment services.
Both antitrust charges, if proven, will mean Amazon is in breach of Article 102 of the Treaty on the Functioning of the European Union, which prohibits abuse of a dominant market position within the internal market of the EU. In a statement Amazon said it “disagree[s] 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.”