Amazon is currently being charged by the European Union saying that the retailer has misused its position to compete against third-party businesses using its platform.
The officials are believed to have enough evidence to prove their charge for misuse. The claim goes that Amazon uses data to build copycat products to undercut these independent businesses, especially in large markets like France and Germany.
At the same time, regulators have opened a second investigation into favourable treatment around the “Buy Box” and the “Prime Label.”
Officials suspect that independent sellers that use Amazon’s own logistics network are able to use features that those with their own logistics networks do not. Vestager said that they want those independents to be able to “compete on the merits” rather than on any sort of lock-in.
Amazon is not only a retailer itself, but it’s also a retail platform that lets third parties sell their wares side by side with Amazon’s own. These independent, unaffiliated companies can even piggyback on Amazon’s vast logistics and warehousing network.
Amazon has said that using third-party seller data in this manner is against its own policies and affirmed that position in Congress.
Amazon has also said that the practice of producing “private label” goods is used by every major retailer, and isn’t a threat to the independent brands they sell. But regulators in both the US and Europe aren’t satisfied with that answer and are pushing for more information.
In July 2019, the EU opened a formal investigation to see if what Amazon was doing violated local competition rules, with today’s charges the result of that procedure.
This isn’t the first time that Vestager has led an assault against Amazon, and three years ago charged the company with receiving state aid from Luxembourg. As part of the EU’s work to keep the free market free, member countries cannot offer favorable treatment to companies. Officials found that Luxembourg had handed over around €250 million ($294 million) in illegal state aid.
An Amazon spokesperson has responded, saying that the company disagrees with the EU’s claims, and it will “make every effort to ensure it has an accurate understanding of the facts.” They added that Amazon “represents less than one percent of the global retail market,” and that “no company cares more about small businesses.”
