November 10—European Union regulators filed antitrust charges against Amazon related to its activities in France and Germany. Margrethe Vestager, the European Commissioner for Competition, alleges the corporation hampers the growth of third-party sellers on its e-commerce platform. Vestager began investigating the Big Tech firm’s business practices in July 2019.
EU authorities have also launched a new probe into how Amazon administers its hugely popular platform.
The European Union v. Amazon
The European Commission began its inquiry into Amazon to determine if it used independent retailers’ data to prepare its own offerings. Sixteen months later, the organization found the corporation abused its position as a marketplace provider to support its efforts as a vendor.
In particular, Vestager claims the e-commerce giant utilizes its non-public information access to shape its product development and pricing decisions.
The EU asserts that Amazon’s conduct limited the growth of its French and German third-party retail partners. Those two regions represent two of the firm’s biggest markets within the region. According to the commission, 70 percent of Gallic online shoppers used the service in the last year, as did 80 percent of Teutonic digital purchasers.
Amazon issued a statement publicly addressing the European Commission’s accusations. The corporation disagreed with the regulator’s findings and pledged to “ensure it has an accurate understanding of the facts.”
If found guilty of violating EU antitrust laws, the e-retailer could face a fine totaling 10 percent of its annual revenue. CNN estimates it might be slammed with a $37 billion penalty based on its projected 2020 gross income.
A Second EU Probe
Vestager revealed her organization is also probing Amazon for improperly driving independent retailers to bolster its revenues.
The regulatory body suspects the firm gives preferential treatment to sellers that take part in its fulfillment program. The commission thinks the corporation might reward third-parties that are deeply immersed in its ecosystem with Amazon Prime sales promotions.
It also reckons it uses retailer services usage as a metric when making its “Buy Box” listings. In the past, the e-commerce company contended its one-click recommendations are based on customer buying habits and shipping speed.
Given the size of its target, the European Commission’s second investigation of Amazon could last several years. That said, the organization has a history of issuing massive penalties if it feels they are warranted. In the past, the regulator levied $9.3 billion in fines against Google for various regional rule violations.
Scrutiny at Home and Abroad
In addition to its troubles across the Atlantic, Amazon is also facing antitrust scrutiny in its home market.
Last month, the House Judiciary Antitrust, Competition, and Administrative Law Subcommittee published a 449-page report on America’s Big Tech sector. The group found Amazon, Apple, Facebook, and Google engage in anticompetitive behavior that requires federal remedy.
Like the European Commission, the subcommittee also accused Amazon of acting as a monopoly by favoring its products over those offered by third-party retailers.
After the House subcommittee’s report went public, the U.S. Department of Justice sued Google because of its supposedly anticompetitive practices. If the Justice Department takes similar action against Amazon, the EU’s investigation and determinations will likely be referenced by American prosecutors.
In that scenario, the e-commerce corporation would have to fend off serious government probes on two continents.