EU opens Amazon competition probe over marketplace data

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

Europe’s top competition watchdog has opened an investigation into whether Amazon (AMZN) is using data collected through its marketplace business to give itself an unfair advantage in e-commerce.

The European Commission on Wednesday formally opened the anti-trust probe, which focuses on Amazon’s use of data from independent retailers on its marketplace platform.

Competition commissioner Margrethe Vestager said in a statement: “European consumers are increasingly shopping online. 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.”

Amazon lets third-party vendors sell products on its website, alongside Amazon’s own stock, through its marketplace business. The European Commission’s probe will focus on whether Amazon’s use of data collected from other sellers is harming competition.

European Competition Commissioner Margrethe Vestager addresses a news conference in Brussels, Belgium June 11, 2019. Photo: REUTERS/Francois Lenoir

The European Commission said its preliminary findings show Amazon collects data on these third-party sellers and uses “competitively sensitive information”.

Amazon has in the past been accused of creating own-brand versions of products that were selling well from third parties and then promoting them above other merchants. The Commission asked sellers last year if this was the case.

The Commission will also investigate Amazon’s use of the “Buy Box” — the prominent add to basket button listed alongside products on the website. If marketplace vendors aren’t the preferred seller, then shoppers have to click through to another page to see their offers.

“Winning the ‘Buy Box’ seems key for marketplace sellers as a vast majority of transactions are done through it,” the Commission said in its statement. The investigation will focus on how Amazon decides to award this button feature.

A spokesperson for Amazon said: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”

The Commission said that the probe “does not prejudge its outcome” and said the investigation has no set deadline.

Vestager, who is completing a five year term as competition commissioner, has been a scourge of US big tech. The competition watchdog has levied billion dollar fines against Google (GOOG) and ordered Apple (AAPL) to pay billions in back taxes to Ireland during her term.