After an investigation was initiated in July 2019, the European Union (EU) has just warned Amazon of abuse of a dominant position.
Statement of complaint and initiation of a second investigation
The European Commission has sent Jeff Bezos’ company an objection notice to inform them of the conclusions of the investigation. This is not a lawsuit in and of itself, but it is an important limitation. The EU accuses the e-commerce giant of using its third-party vendors’ data to promote its own offerings and products in its two largest European markets, France and Germany:
“As a marketplace service provider, Amazon has access to non-public business data from third-party providers, e. B. the number of product units ordered and shipped, the seller’s revenue in the market and the number of visits to seller offers, data related to shipments, past seller performance and other consumer complaints about products, including warranties activated. “
On the other hand, Amazon is accused of using its “Buy Box” to the detriment of its competitors to its advantage. This is the famous tab where we can read “Add to cart” next to the products presented on the market. The EU has announced that it will take the decision to open a second investigation into the matter:
“The commission will examine whether the criteria set by Amazon for the selection of the ‘Buy Box’ winner and the ability for sellers to offer products to Prime users under Amazon’s Prime loyalty program result in a treatment preferred for the retail store of Amazon or for sellers who use Amazon’s logistics and delivery services. “
Amazon faces a substantial fine
This practice violates the anti-competitive laws applicable in the European Union. If the Commission confirms this, it would “be in breach of Article 102 of the Treaty on the Functioning of the European Union, which prohibits abuse of a dominant position in the market”. In this case, Amazon would risk a fine of up to 10% of its annual income and therefore amount to several billion euros.
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“We have to ensure that platforms with a dual role and market power like Amazon do not distort competition. Data relating to third party activity should not be used for the benefit of Amazon if it competes with those sellers. The competitive conditions on the Amazon platform must also be the same. The rules should not artificially favor Amazon’s retail offerings or the offers of retailers who use their logistics and delivery services. With the rise of e-commerce and Amazon as the main platform in this area, it is important that all sellers have fair and undistorted online access to consumers, ”said Margrethe Vestager, Vice-President of the European Commission.
This decision is made because Amazon is also in the sights of the US authorities and the EU is preparing to tighten its tone through new laws in view of the GAFA monopoly.