EU Files Antitrust Charges Against Amazon

Posted on November 10, 2020 by Paul Thurrott in Amazon with 18 Comments

The European Commission has determined that Amazon is violating antitrust laws by “distorting competition in online retail markets.” It has also opened a second antitrust investigation into the online retailer to determine whether it undermines third-party sellers.

“We reached the preliminary conclusion that Amazon illegally has abused its dominant position as a marketplace service provider in [Germany and France],” EU Competition Commissioner Margrethe Vestager tweeted of the charges. “Amazon may have used sensitive data [and] big scale to compete against smaller retailers.”

More formally, the EU charges that Amazon “systematically relies on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon’s own retail business, which directly competes with those third-party sellers.”

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” a quote attributed to Ms. Vestager notes. “Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favor Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”

Put simply, Amazon is doing on its own website what Google does: Because it is the gatekeeper to customer searches, it knows what products and services are popular and trending[,] and then it redirects their customers to its own alternatives.

As to the second investigation, it appears to be an extension of the current charges. In this case, Amazon is also extending its abuse to include its logistics and delivery services (which is referred to on Amazon.com as “fulfillment by Amazon or FBA sellers”).

“The Commission will investigate whether the criteria that Amazon sets to select the winner of the ‘Buy Box’ and to enable sellers to offer products to Prime users, under Amazon’s Prime loyalty program, lead to preferential treatment of Amazon’s retail business or of the sellers that use Amazon’s logistics and delivery services,” the EU says.

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Comments (20)

20 responses to “EU Files Antitrust Charges Against Amazon”

  1. toukale

    I am not sure I agree with the EU here, what Amazon is doing is not new or anti-competitive from what I can tell. That has always been the case in retail, retail stores have been able to offer their own white label brand right next to the others since forever while also having access to those data. How else do the EU think those retail chains/stores decides which products to offer. It seems Amazon is getting punished because they were successful at using that approach and scale it up. If the EU is making that argument, then every retail stores/chains should not be able to offer their own white label products.

    • anoldamigauser

      In reply to toukale:

      White label brands are generally cheaper alternatives to brand names.

      What Amazon is doing is using the data it collects to its own advantage, while putting third party sellers at a disadvantage. They can change their pricing,since they know what others are charging. They can order search results to favor themselves or third parties who are paying them more. Customers do not know why the results that are returned are in any order and generally choose the first option because it requires less thought.

      It is sort of like a casino where the house not only wins, but gets to improve the odds by looking at the deck before dealing.

      • toukale

        In reply to AnOldAmigaUser:

        I don't disagree with your notion but that's not different than what other retail outlets have been able to do forever. That's what I take issue with here, that's been the rule of the game since forever. What the EU is saying is Amazon needs to be one or the other but not both. A rule like that would kill white label offers from stores.

        • anoldamigauser

          In reply to toukale:

          Certainly, retailers have been mining data from sales forever, but the difference here is that Amazon is the market provider. Third party vendors do not have the ability to mask their data from Amazon's view, and they are dependent on Amazon to provide that market. If they use another marketplace, they get less traffic because people are lazy and muscle memory is easy so they go to Amazon when they need something.

          They are the gatekeeper for online shopping, and they abuse that position.

          • toukale

            In reply to AnOldAmigaUser:

            So, they want to define Amazon as its own market? Is that what you are telling me? It's not Amazon's fault people go to them to shop. You can't define Amazon as the entire e-commerce market when they have at best 1/4 of the entire thing. This seems like a sloppy way to go about it.

            • anoldamigauser

              In reply to toukale:

              It is not a percentage thing, stop worrying about that. It is a harm to competition thing since Amazon holds all the cards.

              In the words of Elvis Costello, the third party vendors "...stand to be insulted, and they pay for the privilege."

              • toukale

                In reply to AnOldAmigaUser:

                This is the same issue third parties are having with Apple and the AppStore. There is no way around it, the platform owner will always have this build in advantage. The only way for an Amazon or Apple etc... not to have this type of build in advantage is to not be a seller on the platform. Not sure any company are going to start a platform for them not to be able to participate. Third party vendors don't have a right to be on those platforms, they can always not do business on those platforms.


                There are costs associate with setting up and running those platforms. Those companies spent years and billions of dollars to get to where those platforms are. It did not just happen on its own.

            • LT1 Z51

              In reply to toukale:

              This has nothing to do with White Label. It has to do with that on Amazon (like on New Egg or many other sites) a specific PRODUCT can be offered by multiple "retailers". In that sense on Amazon.com, Amazon is a monopoly. Amazon controls 100% what is displayed on Amazon.com. So if another retailer is being injured based on how their "store" is being shown on Amazon.com


              Anecdotally, imagine a CD can be purchased from 10-15 retailers on Amazon.com. If Amazon always shows the lowest price by default (regardless of retailer) that would be OK but if Amazon (the retailer not the website) always has the lowest price (because it knows all the prices of other retailors) then that's an abuse of power. It should set prices independent of "winning"

            • wright_is

              In reply to toukale:

              There are plenty of example, like the daiper company that Amazon forced into bankruptcy.

              There have been many cases of Amazon looking at new products coming along and when they start selling well, they have a clone of the product made dirt cheap and then bury the original product.

              Or they have a better relationship with one vendor (they pay more), so competitors get buried.

    • wright_is

      In reply to toukale:

      Yes, but traditional stores aren't in such a dominant position, generally. Also, they don't generally put their product front and centre and hide the original product in a locked filing cabinet, in a disused toilet, in the basement, with no stairs, and the light is broken, with a sign on it saying beware of the leopard...

      (Edit: replaced monopoly with dominant position, which is the official description used.)

    • bob_shutts

      In reply to toukale: EU anti-trust laws are significantly different from U.S. laws. EU laws cast a wider net, ie actions that are OK in the U.S. may yet violate EU law. As a U.S. citizen I'm sorry to see Amazon and Google sued, but they have to play by the rules of where they do business.


      • toukale

        In reply to Bob_Shutts:

        I do not have any issues with countries having their local laws, I agree they should. I take issue with what the EU is trying to do here instead. This seems more like protectionism than Amazon breaking any laws, or monopoly or anti-competitive behavior. The EU may as well stop pretending and go the whole China route. I would respect it and understand the reasoning for doing it.

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