Europe charges Amazon with using dominance and data to squeeze rivals

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The European Union charged Amazon with damaging international competition within the retail space, alleging that the US tech titan uses its size, power and information to obtain an unfair advantage over smaller retailers which sell on its platform.

The movement by competition primary Margrethe Vestager, the latest EU salvo against US technology giants, comes at a time once the COVID-19 pandemic has shrunk Amazon’s role in the international market, with online sales soaring in lockdowns.

The European Commission has been investigating Amazon’s position as both a market for merchants and a rival seller, although the company also faces scrutiny in the US within its alleged mistreatment of vendors, in addition to its dual role.

The EU regulator looked into how Amazon gathers data on competitors that market on its stage, offering everything from electronics and toys into food and kitchenware. It says that Amazon uses that sensitive data, which shows what is proving popular or not, to target its own products.

Vestager, who has a reputation of being among the world’s toughest antitrust enforcers, said regulators needed to ensure that dual-role platforms together with market power, such as Amazon, did not distort competition.

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“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate,” the firm said.

A US Congressional antitrust report earlier this season into the alleged misuse of market power by Amazon also increased the concerns highlighted by the EU and is very likely to affect the situation US regulators bring against the company.

US Representative David Cicilline, a Democrat and the very best antitrust lawmaker in the House, applauded the EU and urged the US Federal Trade Commission to take similar action.

“As we found as part of a 16-month bipartisan investigation, Amazon has monopoly power over sellers on its platform,” Cicilline said.

The EU prices are the most recent example of how watchdogs across the planet, led by Europe, are grappling with the challenges of regulating Big Tech, businesses that have attained dominance in their fields and vast troves of user data.

On Vestager’s view, the EU has imposed substantial fines on Alphabet’s Google and other businesses.

A closing EU decision may come next year. Amazon confronts being fined up to 10% of its global turnover when found guilty of breaching antitrust rules. Nevertheless it can avoid a hefty punishment along with a finding of wrongdoing by offering concessions to settle.

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The EU contest enforcer has been exploring Amazon since July last year following rival traders voiced their grievances. The regulator said the charges related to Amazon’s activities in France and Germany, its two largest markets in Europe and in which it is the dominant player.

The case focuses on its use of merchant information on its platform. Vestager said her officials had trawled 80 million transactions and examined 100 million goods on Amazon’s platform to put the situation together.

The European Commission also opened a fresh study into Amazon on Tuesday, over the possible preferential treatment of its retail offers and those of market sellers that use Amazon’s logistics and delivery solutions.

That research will check into the possible preferential treatment of Amazon’s own retail offers and also those of marketplace sellers using Amazon’s delivery and logistics services.

Regulators will inquire into the standards the company uses to pick winners of its “buy box”, which enables clients to add things from a particular retailer directly in their shopping carts.

“Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services,” Vestager said, mentioning the significance of e-commerce, a place that has gained significance with the COVID-19 pandemic.

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The team at Platform Executive hope you have enjoyed the ‘Europe charges Amazon with using dominance and data to squeeze rivals‘ article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Foo Yun Chee. Additional reporting by Radhika Anilkumar in Bengaluru and Nandita Bose in Washington DC. Editing by Pravin Char and Alexander Smith.

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