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Monday 09 December 2019

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EU to investigate Amazon’s use of merchant data

Written by Hannah McGrath
17/07/2019

The EU’s competition watchdog has launched an investigation into Amazon’s use of merchant data, as regulators continue to put pressure on tech companies’ use of customer information.

The office of Margrethe Vestager, the competition commissioner, confirmed that the European Commission (EC) has opened a formal probe into the e-commerce giant’s use of sensitive data from independent retailers who sell on its marketplace.

Amazon is the latest tech giant to come in for scrutiny from the EC’s competition authorities, with Vestager able to fine companies up to 10 per cent of global turnover. In March, the EC slapped Google with a €1.49 billion fine – the third levied against the search giant for its online advertising practices.

In a statement, the EC highlighted Amazon’s dual role as a both a retail platform and a marketplace where independent sellers can market products directly to consumers.

The investigation will focus on Amazon’s data gathering activities in relation to its role as a marketplace, as well as the uses it makes of this third party information.

The statement read: “Based on the commission's preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace.”

The EC has been taking feedback from retailers and manufacturers since September on Amazon’s role in the e-commerce marketplace.

It will examine the agreements between Amazon and marketplace sellers which allow Amazon's retail business to analyse and use third party seller data, seeking to establish whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.

The investigation will also consider the role of the ‘buy box’ which appears at the top of search results on Amazon’s website and is key for marketplace sellers as the majority of transactions are carried out through here.

If the commission proves that Amazon is using competitively sensitive marketplace seller information on this feature, it may be in breach of EU competition rules.

Vestager said: "E-commerce has boosted retail competition and brought more choice and better prices, but we need to ensure that large online platforms don't eliminate these benefits through anti-competitive behaviour.

“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,” she added.


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