Amazon faces a EU probe on how it is using merchant data

Source: https://retail.economictimes.indiatimes.com

European Union regulators are checking whether U.S. online retailer Amazon is using merchants’ data in a way that stifles competition, Europe’s antitrust chief said on Wednesday.

The comments by European Competition Commissioner Margrethe Vestager come as the world’s largest online retailer faces calls for more regulatory intervention and even its potential break-up because of its sheer size.

Vestager said the issue was about a company hosting merchants on its site and at the same time competing with those same retailers by using their data for its own sales.

She said the probe will look at whether the data, which is collected for legitimate purposes, is also used to give Amazon a competitive advantage over the smaller merchants by giving it insights into what kinds of things people want to buy.

“We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full,” Vestager told a news conference. “These are very early days and we haven’t formally opened a case. We are trying to make sure that we get the full picture.”

Seattle-based Amazon declined to comment. Half of all items sold on its site globally come from small- and medium-sized businesses. Last year, third party sellers in Britain sold more than 2.3 billion pounds ($3.03 billion) worth of products outside the country while in Germany, they sold 2.1 billion euros ($2.45 billion) outside Germany.

Vestager has the power to fine companies up to 10% of their global turnover for breaching EU antitrust rules.

This probe is the latest move by the European Union to subject big tech companies to increasing scrutiny, amid worries that they are becoming too dominant.

Amazon has been the target of previous EU investigations. Last year, officials ordered it to pay $295 million in back taxes to Luxembourg after finding that the company profited from a tax avoidance deal with the tiny European country. EU officials also investigated Amazon’s e-book business, which was resolved last year.



Categories: Business, E-commerce, Europe, Germany, Retail, USA

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