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European Commission Launches Probe into Amazon Competitive Practices

7:18 AM, Jul 17, 2019 — The European Commission said Wednesday it has opened a formal antitrust investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of European Union competition rules.

When providing a marketplace for independent sellers, Amazon “continuously collects data about the activity on its platform,” the Commission said. Based on its preliminary fact-finding, it said that Amazon “appears to use competitively sensitive information” — about marketplace sellers, their products and transactions on the marketplace.

As part of its probe, the Commission said that it would look into the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyze and use third-party seller data. In particular, the Commission said it would focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.

The probe will also look at the role of data in the selection of the winners of the “Buy Box” and the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it, the Commission commented in its statement.

“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 behavior,” Margrethe Vestager, the European Union Commissioner in charge of competition policy, said. “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.”

The opening of a formal investigation doesn’t prejudge its outcome and there is no legal deadline for bringing an antitrust investigation to an end.

Companies: Amazon.com, Inc.
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