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Amazon Use of Seller Data Is Anticompetitive Says EU

Amazon
Amazon Use of Seller Data Is Anticompetitive Says EU

In 2007, a Wall Street analyst warned online sellers about listing on a marketplace that could turn around and compete with them, specifically pointing to Amazon.com. Many years later, government regulators in the US and Europe are scrutinizing Amazon practices along with those of other large tech companies to assess the anticompetitive threat they may pose to smaller companies.

The European Commission announced today it has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets.

“The Commission takes issue with Amazon systematically relying 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,” it wrote.

Amazon issued a statement taking issue with Commission’s stance, which the Washington Post picked up:

“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts. Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate.”

It added, “No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” according to CNBC, which said the Commission will also look into practices around Amazon’s “Buy Box” feature.

In Tuesday’s announcement, the European Commission got specific about the type of non-public business data it says Amazon uses to its own advantage, including:

  • number of products ordered and shipped
  • sellers’ revenues on the marketplace
  • number of visits to sellers’ offers
  • shipping data
  • sellers’ past performance
  • other consumer claims on products, including activated guarantees

The Commission said that Amazon employees use that data “to calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers.”

You can find the full announcement on the Europa.eu website.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

One thought on “Amazon Use of Seller Data Is Anticompetitive Says EU”

  1. Finally! It is about time that Amazon were investigated! We KNOW they are doing this but they always manage to fly under the radar.

    “No company cares more about small businesses or has done more to support them over the past two decades than Amazon.” Don’t make me laugh. All they are about it how much money they can skim off sellers in more and more creative ways.

    On top of having to scrape by because adverts are hidden and the necessary ‘Buy Box’ is made difficult for most sellers to obtain unless they jump through Amazon’s ridiculous ‘hoops’, the way that the sellers are treated is abysmal.

    Seller Support is a joke and the operatives are either deliberately obtuse or very badly trained (probably both). Their ‘cut and paste’ link answers are less than useless and almost never answer the questions directly. Basically, if you have a problem on Amazon, you are on your own. The only time Amazon sit up and take notice is if they are threatened with legal action.

    Sellers are constantly bombarded with one-click surveys that ask the same questions over and over (they took away the option to comment on those questions). Judging by the seller boards, they are totally fed up with them and yet nothing improves. If anything, more and more rules are created.

    The result of all of this is that a seller has to be selling an extraordinary amount of items to make a worthwhile profit. All the while, being treated very shabbily and accounts closed on the whim of Amazon, who act like psychopaths when it comes being given a chance to put a case forward and try and get the seller account back. No, I’ve never had my account closed but I’ve seen the result on others and it is heartbreaking how easy it is for Amazon to bankrupt a seller because, well, they can.

    I bought something on Amazon recently and realised that it was not needed. When I tried to return it, I was told it was too dangerous an item to return. It was a calculator. Bear in mind that it had come from one of their fulfilment centres, so they had stored it in their warehouse. Now, however, it was too ‘dangerous’ to receive back (as ludicrous as that sounds). I contacted Amazon and asked for an explanation and was told that I should not worry since they were going to GIVE me the item and refund in full.

    I was shocked at how the operator talked to me, as if I was some kind of demi-god. If I was not a seller on Amazon, I would have not realised what was really going on. I know through bitter experience that the poor seller of that item will have lost out. The seller would have received a notification of the money being removed from their account and suffered the loss. Amazon will still have made their profit on it, though.

    What shocked me the most, though, was the way the operator spoke to me. She told me that I was extremely important and that nothing was too much trouble. So, this was a different kind of Amazon support that I had never experienced before. As a seller, I am so used to be fobbed off and made to feel that I do not have a voice.

    If I was a dishonest person, I would see a wonderful loophole here to extort as many sellers as possible. All I needed to do is buy items that Amazon consider ‘dangerous’ (and lets face it, their list is long), then tell Amazon I wish to return them. I get to keep the item and have a refund. It is appalling that buyers are being groomed this way whilst the poor sellers are suffering. Incidentally, Amazon always get to keep any money they have made in any scenario of the seller losing money.

    So, now Amazon are finally being investigated for anti-competitive practises. I have experienced it myself. On one occasion, Amazon lost a shipment of hand-made items (which were very labour-intensive).They told me they would compensate me provided I sent them invoices showing how much I had paid for the items. This I did only to be told that they would only compensate me a little more than the amount on the invoices (what they considered as the ‘marketplace price’. The end product was not taken into account at all and I lost a lot of money.

    To rub salt into the wound, many months later Amazon seem to have ‘found’ my items. Did they contact me and tell me? Nope. I know because they piggybacked onto my advert (which I had created) and undercut me. So, not only did they make a handsome profit from all my hard work but they also stopped customers buying from me until all ‘their’ stock had gone.

    I really hope that something comes of this investigation but I am not holding my breath. They seem to get away with extraordinary things that an average person would end up in prison for.

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