Amazon is coming under the microscope of the European Union’s antitrust watchdog.
As the internet giant becomes more powerful by the day, the EU’s Competition Commission is tentatively beginning an antitrust probe into the way it uses data. Margrethe Vestager, the European competition commissioner, stressed that the probe is still in its very early days and that an inquiry has yet to be formally launched.
Amazon declined to comment.
Vestager said the probe will focus on trying to determine if Amazon is using data from its small business customers, who sell goods on its platform, to its own advantage.
“The question here is about the data because if you as Amazon get the data from the smaller merchants that you host, which of course can be completely legitimate because you can improve your service to these smaller merchants,” Vestager said at a press conference on a separate issue. “Do you also then use this data to do your own calculations as what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things?”
In addition to providing a market place for other merchants, Amazon sells its own products through roughly 76 private label brands on its site, from apparel to mid-century furniture to diapers. Some of them are branded as Amazon, including its dietary supplement line Amazon Elements and the AmazonBasics range of everyday goods, while others brands such as the Lark & Ro are not.
Vestager added that the commission is in the process of gathering information on the issue and has sent questionnaires to market participants in order to try and understand the issue in full.
“These are very early days. We have no conclusions we haven’t formally opened the case, but we are trying to make sure that we get the full picture,” she said.
While it is in the early stages, the stakes are high. If the commission does in fact find that Amazon breached antitrust rules, fines can amount to 10 percent of global annual turnover.
That was followed by another record-breaking 4.3 billion euros fine this summer for violating antitrust rules to bolster its search engine on Android devices. Google is currently appealing both rulings.
Amazon has run into the trouble with the European authorities on other issues before. It was previously fined 250 million euros in alleged unpaid taxes to Luxembourg, a move which it has appealed.