Amazon Faces Tough Antitrust Charges in European Union

After two years of investigation, the Executive Commission of the European Union (EU) formulated this November 10 antitrust charges against Amazon.

The e-commerce giant was accused of using the privileged access it has to data from vendors using its platform to gain unfair commercial advantages.

The block’s main antitrust agent opened a second investigation to clarify whether Amazon favors product offerings that use its own logistics and delivery system.

“Our concern is a very specific business conduct that seems to distort genuine competition,” said Margrethe Vestager, European Competition Commissioner.

What are the charges

According to the AP agency, EU officials focused on the company’s dual role as a market and a retailer.

In addition to selling its own products, the US company allows third party retailers to sell their own products through its site.

The commission opposed Amazon’s systematic use of business data to which it has exclusive access in order to avoid the normal risks of competition and to take advantage of its dominance in France and Germany, the company’s two largest markets in the European Union.

Amazon faces a potential penalty of up to 10 percent of its annual worldwide revenue, which could rise to $28 billion depending on its 2019 earnings.

Researchers analyzed data covering 80 million transactions and 100 million products listed on Amazon’s site.

According to Vestager, they found that “very granular, real-time business data” on product listings and third-party transactions was entered into algorithms for Amazon’s retail business, which decides which new products to launch, their price and supplier.

The second research aims to establish how Amazon decides which products are chosen for the “checkout” and for its Prime membership service. It also seeks to determine if that means they receive preferential treatment from the company’s logistics and delivery services.

Bezos Company Downloads

In a statement, Jeff Bezos’ company rejected the accusations of the European bloc.

“We do not agree with the preliminary statements of the European Commission and will continue to do everything possible to ensure that it has an accurate understanding of the facts,” the firm said.

Under EU rules, the company can respond to the charges in writing and present its case at an oral hearing.

The charges against Amazon are in addition to fines of nearly $10 billion that the European Union has levied on Google in recent years, and the two investigations against Apple opened in 2020.