EU accuses Amazon of antitrust violations for abusing merchant data on its platform

The European Commission has formally accused Amazon of misusing third-party merchant data on its platform to gain a competitive advantage for its own products. The new antitrust case marks European regulators’ latest salvo against the dominant U.S. tech companies.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” EC executive vice president Margrethe Vestager said in a statement. “Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair.”

The EC said it is opening a second antitrust investigation involving Amazon’s “Buy Box” and will seek to determine whether the company is also abusing services such as Prime to favor its products or merchants that use its logistics services.

The antitrust charges come amid concern across Europe about the expansion of Amazon’s influence, particularly during a pandemic that has forced many physical retailers to remain closed and highlighted the weakness of their ecommerce services. While the investigation was announced two years ago, regulators are now pushing even harder to ensure a level playing field for all ecommerce players.

We reached the preliminary conclusion that @amazon illegally has abused its dominant position as a marketplace service provider in DE & FR. @amazon may have used sensitive data big scale to compete against smaller retailers. Now for @amazon to respond. @EU_Competition

— Margrethe Vestager (@vestager) November 10, 2020

According to a statement, the regulators are concerned about Amazon enabling third-party vendors to sell their goods on its platform while it also pushes its own competing products. Specifically, regulators accused Amazon of abusing the data it collects on those third-party sales to boost its own offerings.

EC regulators said Amazon’s role as a platform gives it access to third-party data such as the number of orders, products shipped, and merchant revenues. According to the EC’s investigation, Amazon’s retail employees have been accessing that data and using it to “calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers.”

The EC believes Amazon has violated antitrust rules by using its platform to reduce the risk of competition.

“Its rules should not artificially favor Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services,” Vestager said in her statement. “With ecommerce booming and Amazon being the leading ecommerce platform, a fair and undistorted access to consumers online is important for all sellers.”

Regarding the new investigation, the EC noted that the Buy Box on Amazon’s site makes it easier for consumers to add products from third-party retailers to their baskets, so retailers Amazon chooses to feature enjoy an advantage. Likewise, the EC is looking at how Amazon controls access to its Prime subscription delivery service, a critical gateway that accounts for a growing portion of sales on the platform.

The EC said it will examine both services to see if they “lead to preferential treatment of Amazon’s retail business or of the sellers that use Amazon’s logistics and delivery services.”

The new charges come as the EC continues pursuing multiple antitrust cases against Google and Apple, although these cases will likely take years to resolve. Under Vestager’s leadership, the EC has carved out a reputation for being tougher on Big Tech companies than U.S. regulators. That may be shifting, however, as the U.S. Department of Justice recently filed an antitrust case against Google.

VentureBeat has reached out to Amazon for comment and will continue to update this story.