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The European Commission has made a preliminary view that Amazon breached Article 102 of the Treaty which deals with the Functioning of the European Union. It was alleged that Amazon has distorted competition in online retail markets. European Commission announced that it had recently sent a Statement of Objections to the e-commerce company.
Details of the cases can be accessed on the Commission’s competition website and case register:
- Case 40462: use of marketplace seller data
- Case 40703: an investigation into Amazon’s business practices
Article 102 (formerly Article 82 TEC) reads as below:
“Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it.” Amazon is alleged to be dominant in France and Germany which are its biggest markets in the EU. The Commission said, “Amazon systematically relies on non-public business data of independent sellers on its marketplace to the benefit of its own competing retail business. This data includes the number of units of products ordered and shipped, sales revenues, and the number of online visits made to offers.”
Preliminary findings of the commission show that:
- Very large quantities of non-public seller data are available to Amazon’s employees and flow directly into the automated systems of its retail business in real-time.
- This act allows Amazon to focus its offers on the best-selling products and adjust its offers based on non-public data.
The Commission also opened a formal antitrust investigation. This investigation will take place into the possible preferential treatment used by Amazon’s own retail offers and those marketplace sellers who use Amazon’s logistics and delivery services. This activity particularly focuses on the selection of sellers for the “Buy Box” and inclusion in the Prime loyalty program.
This investigation will be given the utmost priority covering the European Economic Area. Italy won’t be covered in the European Economic Area under this investigation as a competition investigation is already going on.
In a statement, Commission Executive Vice-President Margrethe Vestager, in charge of competition policy, said, “Our aim was to ensure that dual-role platforms such as Amazon do not distort competition: With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
The Commission’s investigation started in July 2019 when many complaints were made by sellers. It also included a data sample depicting more than 18 million transactions and 100 million products. The Statement of Objections is nothing but a formal step in investigations of suspected violations of EU antitrust rules. It nowhere prejudges the final outcome of an investigation.
Amazon now has the following options:
- To examine the relevant documents,
- To reply to the allegations made upon it,
- To request an oral hearing.
What if amazon found guilty?
Amazon has to face a fine of up to 10% of its global turnover. The Commission also has a right to impose other remedies such as the separation of the company’s businesses. However, Amazon was reported as saying, “We disagreed with the findings, and would contest them. Any penalties imposed by the Commission can be appealed before the EU Court of Justice.”