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If only we had a nickel for every big-tech antitrust story this year.
Margrethe Vestager, the European Commission's top antitrust official, laid out fresh charges against Amazon yesterday for alleged bad behavior in France and Germany.
The European Commission has two primary complaints:
First: After an investigation that began in July of 2019, the Commission determined Amazon unlawfully exploited its dual role as both a marketplace and a retailer:
- Specifically, the report claims Amazon gathers non-public data on third-party sellers (such as purchase and revenue volumes) to inform what type of in-house products it should launch.
- By doing so, the Commission claims Amazon avoids the typical risks seen in the retail industry and “marginalizes third-party sellers and caps their ability to grow."
Second: The EU opened a formal investigation to determine whether Amazon gives preferential treatment to sellers who pay for Amazon's logistics and delivery network.
- The release said, "Our concern is that Amazon may artificially push retailers to use its own related services, which locks them deeper into Amazon's ecosystem."
The Response From Seattle: Amazon flatly denied the charges and said it would work with the EU to "to ensure it has an accurate understanding of the facts.” They added, "No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
Earlier this year, Amazon’s associate general counsel told Congress, “We don’t use individual seller data directly to compete.” Just a short while later, The Wall Street Journal published an article (citing 20 Amazon employees) claiming the company does just that. Awkward day at HQ, no doubt.
What The Experts Say: Some legal analysts say Amazon's behavior is not atypical for a retailer, and prosecutors will have to prove Amazon's tactics lowered competition and drove other retailers out of the market. A high bar.
The Penalty: If Amazon is found to be in violation, the EU can force it to change its business practices and can impose a fine of up to 10% of its annual global revenue - or up to $28 billion.