If only we had a nickel for every big tech cartel story this year.
Margrethe Vestager, the European Commission’s top antitrust officer, yesterday brought another indictment against Amazon for alleged misconduct in France and Germany.
The European Commission has two main complaints:
First: Following an investigation that began in July 2019, the commission found that Amazon was illegally exploiting its dual role as a marketplace and retailer:
Specifically, the report claims that Amazon collects non-public data on third-party sellers (e.g. purchase and sales volume) to determine what type of in-house products to bring to market. In this way, the Commission avoids Amazon avoiding the typical risks in retail and “marginalizing third-party suppliers and limiting their ability to grow”.
Second: The EU opened a formal investigation to determine whether Amazon is giving preferential treatment to sellers who pay for Amazon’s logistics and delivery network.
The press release said, “We fear that Amazon is artificially pushing retailers to use their own related services, thereby deepening them into the Amazon ecosystem.”
The answer from Seattle: Amazon flatly denied the charges, saying it would work with the EU to “ensure it has a thorough understanding of the facts”. They added, “No company cares more about small businesses or has done more in the past two decades to support them than Amazon.”
Earlier this year, Amazon’s Associate General Counsel told Congress, “We don’t use individual seller data directly to compete.” Shortly afterwards, the Wall Street Journal published an article (citing 20 Amazon employees) claiming the company was doing just that. An uncomfortable day at headquarters, no doubt.
What the experts say: Some legal analysts say that Amazon’s behavior is not atypical for a retailer, and prosecutors are required to show that Amazon’s tactics have reduced competition and driven other retailers out of the market. A horizontal bar.
The punishment: If Amazon is found to be breaking the law, the EU can force it to change its business practices and impose a fine of up to 10% of its annual global sales – or up to $ 28 billion.