European Commission to take a closer look at how Amazon uses business data of third-party sellers using its platform
- Reference: 1605019509
- News link: https://www.theregister.co.uk/2020/11/10/ec_amazon_antitrust/
- Source link:
The Commission began sniffing around Amazon [1]last year and today [2]told the retailer that, in its "preliminary view", Amazon had indeed breached EU antitrust rules.
In particular "the Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third-party sellers."
[3]
Amazon workers in Vélizy-Villacoublay in France sorting packages in late 2019
At the root of the concern is data slurped by Amazon, which contains handy information such as quantity of products ordered and shipped by third party sellers on its ecommerce platform, as well as revenues and other juicy nuggets such as visits to sellers' offers and overall performance.
The Commission reckons that this non-public data flows into Amazon's automated systems, which then calibrate Amazon's own offers accordingly. That calibration is, unsurprisingly, "to the detriment of the other marketplace sellers."
Using that non-public data, as far as the Commission is concerned, allows Amazon to side-step the usual risks of competition and also leverage its relative dominance. And so here we are.
We reached the preliminary conclusion that [4]@amazon illegally has abused its dominant position as a marketplace service provider in DE & FR. [5]@amazon may have used sensitive data big scale to compete against smaller retailers. Now for [6]@amazon to respond. [7]@EU_Competition — Margrethe Vestager (@vestager) [8]November 10, 2020
That data isn't the only thing that has attracted the ire of the EC's Margrethe Vestager. The Commission has opened up a second antitrust investigation into the criteria used by Amazon when selecting which seller gets to lurk behind the "Buy Box" on its website. The concern is that the criteria might favour Amazon's own offers or those of sellers that use the company's logistic and fulfilment services.
The "Buy Box" is critical for sellers as, according to the Commission, it shows the offer of one single seller for a given product and "generates the vast majority of all sales."
The findings and views of the Commission are preliminary at this stage. An in-depth investigation will now be carried out following the Statement of Objections and cover the European Economic Area (with the exception of Italy, which has already kicked off its own investigation.)
The Commission also noted that there was no deadline for its investigation, and factors such as the complexity of the case would weigh on the duration.
Amazon told The Register : "We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts."
"Amazon," it went on, "represents less than 1 per cent of the global retail market, and there are larger retailers in every country in which we operate. No company cares more about small businesses or has done more to support them over the past two decades than Amazon. There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually and have created hundreds of thousands of jobs." ®
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[1] https://www.theregister.com/2019/07/17/amazon/
[2] https://ec.europa.eu/commission/presscorner/detail/en/IP_20_2077
[3] https://regmedia.co.uk/2020/11/10/shutterstock_amazon.jpg
[4] https://twitter.com/amazon?ref_src=twsrc%5Etfw
[5] https://twitter.com/amazon?ref_src=twsrc%5Etfw
[6] https://twitter.com/amazon?ref_src=twsrc%5Etfw
[7] https://twitter.com/EU_Competition?ref_src=twsrc%5Etfw
[8] https://twitter.com/vestager/status/1326127321363963906?ref_src=twsrc%5Etfw
[9] https://whitepapers.theregister.com/
About time too
This is IMHO long overdue.
Plus, they need to look at how hard it is to buy anything without signing up for Prime. Possible but not easy.
If Google can be clobbered for putting their 'stuff' at the top of searches then Amazone needed a $100B fine because their 'preferencing' is far, far worse and it is not going to get any better any time soon.
Erm
"At the root of the concern is data slurped by Amazon"
Slurped? You mean people willingly giving this data by using the platform to order. Kinda like shopping at the supermarket where they then work out desirability and positioning to influence sales.
Slurped sounds unnecessary or even wrong, which isnt the case here. Amazon's platform gathering information on what is traded on Amazon's platform to serve customers as to part them from their cash willingly. Aka what people want.
Re: Erm
? The article is about the data of third party sellers, not consumers. The data is used to then out-compete those third party sellers with Amazon's own offerings.
Re: Erm
@Jim Mitchell
"The article is about the data of third party sellers, not consumers"
The third party sellers are also consumers. The third party sellers could set up their own outlet but use Amazon who already has a customer base, a platform that makes purchase simple and handles all the complexities for them, and the additional services of Amazon for them to get their product to a customer who probably never heard of the seller.
"No company cares more about small businesses or has done more to support them over the past two decades than Amazon"
Well at least the investigation hasn't dented their sense of humour.
Conflict of interest
Being the owner of the souk as a whole, while being also a massive trader in the souk creates a massive conflict of interest ... one would think.