The EU’s Competition Commission has opened a formal antitrust investigation into Amazon to investigate whether the company is using sales data to gain an unfair advantage over smaller sellers on the Marketplace platform. The Commission says it will look into Amazon’s agreements with marketplace sellers, as well as how Amazon uses data to choose which retailer to link to using the “Buy Box” on its site. The announcement comes on the same day that Amazon announced changes to its third-party seller service agreement in response to a separate antitrust investigation by German regulators.
“E-commerce has boosted retail competition and brought more choice and better prices,” said the EU’s Competition Commissioner Margrethe Vestager. “We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”
Responding to the news, Amazon told The Verge that it “will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
A preliminary investigation started last September
It’s unclear how Amazon’s changes to its service agreement, also announced today, will affect the EU’s investigation. As part of the wide-ranging changes, Amazon agreed to give 30 days notice and a reason before removing sellers from its platform, and merchants will be able to take Amazon to court in their home countries, rather than being forced to do so in Luxembourg. After Amazon announced the changes, which are due to take effect in 30 days, German regulators agreed to drop their investigation.
Last September, European regulators announced that they were taking a preliminary look at Amazon’s data collection practices. “If you, as Amazon, get the data from the smaller merchants that you host, which can be of course completely legitimate because you can improve your service to these smaller merchants, do you then also use this data to do your own calculations?” Vestager said at the time.
The investigation is the latest, and potentially the last, antitrust action to have been opened by Vestager, who has served as the Competition Commissioner on the European Commission for the past five years. During her tenure, which is due to end in October, Vestager has fined almost all of the major tech giants, including Google, Qualcomm, and Facebook. Apple was also forced to pay back $15.4 billion in taxes, thanks to a ruling by Vestager. So far, Amazon has managed to avoid being fined by EU regulators, but that could all change as a result of this investigation.
Update July 17th, 7:45AM ET: Updated with statement from Amazon and details of its contract changes in response to German investigation.