Europe Union Charges Amazon With Damaged Retail Competition By Using Site’s Data And Size

Amazon has been charged by the European union with allegations that the US company uses its size, power and data to bring down its competitors including small merchants.

Aditi Sharma

November 11, 2020

Trending News

3 min

zeenews

The European Union charged Amazon with damaging retail competition. The union alleges that the company is using its size, power and data to gain an unfair advantage over smaller merchants that sell on its online platform. The move by competition chief European salvo, Margrethe Vestager, the latest European salvo against U.S. tech giants, comes at a time when the COVID-19 pandemic has amplified Amazon’s role in the global economy with online sales soaring in lockdown.

The European Commission investigation has been probing Amazon’s position as both a marketplace for merchants and a rival seller. Amazon is also facing scrutiny in the US marketplace over its alleged mistreatment of sellers as well as its dual role. The EU regulator will be investigating the process of how Amazon collects data on competitors that sell on its platform, offering everything from electronics and toys to food and kitchenware. The alleged probe is regarding Amazon using sensitive information to keep a track of the products’ popularity so as to target its own products on the site.

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In the news conference, the European Competition Commission Vestager said, “The use of these data allows Amazon to focus on the sale of the best-selling products and it marginalises third-party sellers and caps their ability to grow”. The EU competition enforcer has been investigating Amazon since July last year after rival traders voiced their grievances. The regulator said the charges related to Amazon’s activities in France and Germany, its two biggest markets in Europe and where it is the dominant player.

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The case focuses on its use of merchant data on its platform. Vestager said her officials had trawled 80 million transactions and reviewed 100 million products on Amazon’s platform to put the case together. That probe will look into the possible preferential treatment of Amazon’s own retail offers and those of marketplace sellers that use Amazon’s logistics and delivery services.

Earlier, Germany’s anti-trust authority launched an investigation against Amazon. This investigation was in concern of Amazon’s policies in context to its third-party traders. The German watchdog investigation was about Amazon being accused of banning third-party traders to sell on its e-commerce platform. The federal cartel officers would be investigating that this new policy of Amazon inclines with Germany’s laws or not.

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