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.