EC Formally Investigating Amazon for Anti-Competitive Conduct

Amazon is feeling the pressure from the European Commission (EC). There is now officially a formal investigation underway on whether the retail giant breaches competition rules in the European Union.

The commission acknowledges Amazon’s dual role as a platform: I.E. (i) it sells products on its website as a retailer; and (ii) it provides a marketplace where independent sellers can sell products directly to consumers.

Since Amazon continuously collects data about the activity on their platform, including from independent sellers. So the commission is looking into how Amazon is using this information, and whether it is stifling competition.

What Trade Laws are Relevant in Amazon’s Case?

Article 101 of the TFEU prohibits anti-competitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market.

Additionally, Article 102 of the TFEU prohibits the abuse of a dominant position. Furthermore, the implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.

What is the Commissioner Saying About This Investigation?

“European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices,” says Margrethe Vestager. “We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour.”

The EC has actually begun questioning merchants regarding Amazon’s data collection last year.

What Will Happen if Amazon is Found in Breach of Rules?

If the commission determines that there are violations in anti-trust rules, Amazon could pay up to 10% of global annual revenues.

Last year, the EC ordered Google to pay $5 billion fine. for abusing their control of Android.