European regulators are set to file antitrust charges against Amazon over the alleged use of third-party seller data to compete with retailers on its e-commerce platform, the Wall Street Journal reports, citing unnamed people familiar with the case.
Scrutiny of Amazon’s treatment of third-party sellers has escalated after a WSJ investigation, published in April, found that Amazon employees used seller data when considering new private-label products. An Amazon lawyer told Congress last year, “We don’t use individual seller data directly to compete with them.” However, the newspaper’s investigation revealed ways that even aggregated data could provide insights into top-selling third-party products in many instances.
Regulators and legislators in the U.S. and abroad have questioned Amazon’s potential conflict of interest as both a marketplace operator and first-party retailer.
Amazon CEO Jeff Bezos has pointed to the growth of third-party sales on Amazon as evidence that the company is operating a fair marketplace. The share of physical gross merchandise sales on Amazon by third-party sellers was 58% as of 2018.
“Why did independent sellers do so much better selling on Amazon than they did on eBay?” Bezos wrote in his 2019 shareholder letter. “And why were independent sellers able to grow so much faster than Amazon’s own highly organized first-party sales organization? There isn’t one answer, but we do know one extremely important part of the answer: We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build.”
The formal statement of objections against Amazon could come from the European Commission as early as next week or the week after, the WSJ reports.
The report points to a March speech by Margrethe Vestager, the European Commission’s vice president in charge of competition and digital policy, indicating that the EU’s past experience investigating and prosecuting companies such as Google and Alphabet have shaped its approach, and its pursuit of new powers to force changes in business practices.
“We may still find ourselves dealing with digital platforms that have become so dominant that they’re effectively private regulators, with the power to set the rules for markets that depend on those platforms,” Vestager said, according to prepared remarks at the time.
“That doesn’t have to cause any more harm to competition, if they use that de facto regulatory power in a way that lets fair competition thrive. But we know from experience … that these big platforms don’t always do that,” Vestager said. “In fact, our competition enforcement has taught us a lot, about the sort of behavior by dominant platforms that can stop the markets which they regulate from working well. And we can draw on that experience to design regulations that clearly set out what those platforms can do with their power – and what they can’t.”
Amazon hasn’t yet issued a comment on the report of imminent antitrust charges.
