Amazon.com Inc. (NASDAQ:AMZN) faces antitrust charges from European Union regulators regarding abuse of its dominant position in the eCommerce space. Regulators have also opened a second probe about the e-commerce retailer’s business practices.
European Commission accuses amazon of abusing antitrust regulations
European Commission’s top antitrust officer, Margrethe Vestager, said that the company has been abusing its dominant position in France and Germany as the leading online market place. Regulators accused the company of using data to gain an undue edge over merchants on its online marketplace. The US giant has been using non-public business data to avert normal competition risks and leverage its dominance in Europe’s top markets. The EU’s executive commission, which is the top antitrust enforcer in the bloc, said that they have already sent the charges to Amazon.
In 2019 the commission initiated a formal probe into the company’s dual role as a retailer and marketplace. The EU watchdog has been investigating agreements between the e-commerce company and independent retailers regarding whether they are using data from sellers unfairly to avoid competition since it is also offering its products.
Amazon has been using seller data on its marketplace to gain undue advantage
Margrethe said that they acknowledge the fact that Amazon has been a successful business, but the main concern is specific business conduct, which seems to suppress genuine competition. The commission found that Amazon has been feeding non-public seller data into its retail algorithms, such as the number of products ordered. Margrethe said that this helps it decide the products to launch and the price of new offers. She added that this allows the retailer to marginalize third-party merchants hence capping their ability to grow.
Amazon faces a possible fine of up to 10% of its annual revenue globally, amounting to billions of dollars. Based on the company’s revenues this year, the fine could be around $37 billion. The company has, however, disagreed with the preliminary conclusions. In a statement, the company said it would make efforts to ensure the commission understands the facts.