European Commission Slaps Amazon With Antitrust Charges Over Merchant Data 

European Commission Slaps Amazon With Antitrust Charges Over Merchant Data 

Tyler Durden

Tue, 11/10/2020 – 08:39

One day after the European Union said it would impose tariffs on $4 billion of U.S. goods, the European Commission, on Tuesday morning, announced antitrust charges against Amazon over how it manages platform data from third-party sellers that may give it an unfair advantage when selling its products, reported NYT

Margrethe Vestager, the European commissioner who oversees the competition across the 27-nation bloc, said Amazon has distorted competition in the online retail market by exploiting its dual role as an e-commerce platform provider and retailer. The e-commerce giant uses merchant data from its own platform to gain an unfair competitive advantage when selling its own products. 

Margrethe Vestager

Vestager said Amazon uses data from millions of vendors to spot popular retail trends. The online retailer immediately creates a similar product and sells it at a lower cost, crowding out third party sellers. 

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Vestager said in a statement. “Data on the activity of third-party sellers should not be used to the benefit of Amazon when it act as a competitor to these sellers.”

According to Reuters, Amazon disagrees with the E.U. antitrust charges, indicating that its business represents less than 1% of the global retail market. 

Tuesday’s announcement is just the beginning of the regulatory process to charge Amazon for distorting competition in online retail markets, as it may take months or years before penalties are announced or collected. The commission is likely to settle with Amazon. 

The commission also said it began another investigation into Amazon’s strategies that may artificially favor its retail offers and products of other companies that pay to use Amazon’s logistics services.

Amazon shares slid 2% in premarket trading Tuesday.

Other big tech names are trading lower in premarket trading: Alphabet -2.6%, Apple -1.1%, Facebook -2.1%

Last month, the House Judiciary subcommittee on antitrust held its seventh and final hearing on the investigation in digital marketplaces and the business practices of Amazon, Apple, Facebook, and Google. 

No matter which side of the Atlantic, it appears the E.U. and U.S. regulators are finally starting to address and soon recommend policies that would enhance competition in markets dominated by big tech.  

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Author: Tyler Durden