European Union Launches Amazon Antitrust Investigation

Posted on July 17, 2019 by Mehedi Hassan in Amazon with 4 Comments

European Union is launching a new antitrust investigation against a big tech company. This time, it’s Amazon’s turn. The European Commission announced today that it’s opening a formal antitrust investigation into Amazon.

The investigation will look into Amazon’s potential anti-competitive tactics.

More specifically, the European Commission outlined that it will look into how Amazon uses third-party seller data and how the use of the third-party data affects competition. A preliminary fact-finding found Amazon using “competitively sensitive information” about marketplace transactions, their products, and sellers, according to the European Commission.

The commission will also look into how Amazon determines the winners of the Buy Box, which allows marketplace sellers to display their products under many products on Amazon, allowing customers to directly add certain items to their shopping carts. According to the commission, the Buy Box is key for marketplace sellers as a “vast majority” of transactions are done through it. The investigation will involve the commission looking into how the data used by Amazon affects the selection of winners of the Buy Box, and whether it affects competition.

“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.” said Margrethe Vestager, the head of the competition policy at the European Commission.

Amazon issued a statement, citing the company will fully comply with the European Commission’s investigation. “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow,” the company said.

The EU has previously launched similar antitrust investigations against large tech companies, with Google being hit with its third antitrust fine only recently. If Amazon is found to be utilizing anti-competitive tactics here, the company will not only face large fines, it could even have to change the way its marketplace works.

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Comments (4)

4 responses to “European Union Launches Amazon Antitrust Investigation”

  1. Tony Barrett

    I've no doubt whatsoever Amazon are stacking all the cards in there favour. For one thing, rumour has it that if you want to trade on the Amazon marketplace, you're not allowed to sell your products cheaper anywhere else, which I can well believe.

  2. lvthunder

    It's unclear to me what the buy box is?

    • richfrantz

      In reply to lvthunder:

      Me neither. I guess we're not in the "vast majority".

    • markld

      In reply to lvthunder:
      I can't remember what site I got this off of explaining Buy Box and I edited it down a little ... Hope it helps

      Amazon introduced a 'Buy Box' for new books, allowing booksellers to compete with Amazon for the first time.

      There's the goal of winning the Buy Box, it’s however perhaps more accurate to say that a seller wins or loses a share of the Buy Box.

      Once a merchant has passed Amazon’s minimum eligibility requirements, the Buy Box algorithm further breaks down the sellers according to different variables.

      Amazon puts the competitors against each other to determine how they hold up on each variable for the same product.

      ....

      Personally I hoping others will share how this works. I guess it is the algorithms the EU is going after

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