European Commission opens Amazon antitrust probe
Brussels wants clarity on whether Amazon undermines competition with its position as both retailer and marketplace
The European Commission has opened an official investigation into Amazon’s business practices amid concerns the retail giant maintains an unfair relationship with its vast array of third-party sellers.
Commissioner Margrethe Vestager said in a statement that she intended to take a “very close look” at the tension between Amazon’s dual role as retailer and marketplace, to establish if it is in breach of EU antitrust laws.
Vestager, who is in charge of competition policy, said: “European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don't eliminate these benefits through anti-competitive behaviour.”
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The Financial Times quotes Andrea Collart, competition partner at Avisa Partners, saying: “It is an important move and a statement against the big tech giants. The feeling is that Amazon is so present in so many markets that it is too big to regulate. Competition enforcement can be the sling used by David to defeat Goliath.”
The Washington Post, which is owned by Amazon CEO Jeff Bezos, says: “While Amazon’s platform has created opportunities for millions of small and midsize retailers globally, it has also given the company a window into which products sell well on the site and at what price.”
It adds: “Many sellers privately complain about Amazon’s power to undercut them on price and to introduce a similar product based on the copious amount of data it collects.”
As well as investigating the standard agreements between Amazon and marketplace sellers, Brussels said it will also examine “the role of data in the selection of the winners of the ‘Buy Box’”.
This is the box on the right side of the product details page where shoppers can click “Buy Now”. For products with multiple sellers, Amazon has an algorithm to determine which one is represented in the box.
“Winning the ‘Buy Box’ seems key for marketplace sellers as a vast majority of transactions are done through it,” the Commission said.
Amazon has said: “We will co-operate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
As The New York Times reports, on Tuesday, “representatives of Amazon, Apple, Facebook and Google were sharply criticized by lawmakers in Washington over the companies’ market dominance”.
At the hearing on Capitol Hill, Amazon’s lawyer, Nate Sutton, rebutted similar accusations as those levelled by Brussels. “The data on popularity of products - like much retail data - is actually public data”, he said at the hearing. “For each of our products, you can see where it’s ranked, how popular it is. We do not use any of that specific seller data in creating our own private brand products.”
In his written statement to Congress, Sutton clarified just how integral to Amazon’s retail business third-party sales have become for the trillion-dollar enterprise. Since 1999, “third-party sales have grown from 3% of the total, to 58% of our total physical gross merchandise sales”.
The setback for Amazon comes after its Prime Day weekend, which it claimed was “once again the largest shopping event in history”. The company revealed that sales from the bonanza surpassed those from last year’s Black Friday and Cyber Monday combined.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
William Gritten is a London-born, New York-based strategist and writer focusing on politics and international affairs.
-
Why Bhutan hopes tourists will put a smile back on its face
Under The Radar The 'kingdom of happiness' is facing economic problems and unprecedented emigration
By Chas Newkey-Burden, The Week UK Published
-
7 beautiful towns to visit in Switzerland during the holidays
The Week Recommends Find bliss in these charming Swiss locales that blend the traditional with the modern
By Catherine Garcia, The Week US Published
-
The Week contest: Werewolf bill
Puzzles and Quizzes
By The Week US Published
-
Britain's new retail returns nightmare
In The Spotlight Gen Z influencers and a 'poopy diaper' have shown up fault-lines in the system
By Chas Newkey-Burden, The Week UK Published
-
Saks buys Neiman Marcus in $2.65B deal
Speed Read Following the merger of the two legacy retailers, the new entity will be called Saks Global
By Peter Weber, The Week US Published
-
Retail media is seeing a surge this year
The Explainer Amazon now makes more money from advertising than Coca-Cola's global revenue
By Justin Klawans, The Week US Published
-
Amazon vs. the FTC: behind the monumental antitrust showdown
Under the Radar The Federal Trade Commission is taking on the e-commerce giant for allegedly building a monopoly in the online market
By Theara Coleman, The Week US Published
-
Amazon, the 'everything store,' goes to court
Feature Does the retail and tech giant actually have a monopoly or is that argument a bit of a stretch?
By The Week Staff Published
-
Why the FTC antitrust lawsuit against Amazon is so consequential
Talking Point While it's not the first case the federal agency brought against the company, it might be the biggest challenge yet
By Theara Coleman Published
-
Amazon slashes its way to higher profits
feature The tech giant has had a tough few years. But are things on the up and up?
By The Week Staff Published
-
Pros and cons of Amazon Prime Day
feature Sure, toilet paper is 25% off. But what about climate change?
By Brigid Kennedy Published