The European Commission (EC) held a press conference in Brussels last week in which Margrethe Vestager, a European Commissioner for Competition, made an announcement that there has been an initiation of a preliminary anti-trust investigation against the giant online retailer, Amazon, and that the EC has distributed questionnaires to market participants so as to gather more information for building a case.
Amazon has been a well-known e-commerce company for years which started only as an online bookstore and gradually developed into one of the world’s biggest retailers selling both products from their own brand and from third-party sellers. This dual role of Amazon as a selling platform and also a vendor itself has not only contributed a lot to its success, but has also led to the suspicion that its business practice may have violated the anti-trust rules. It is because Amazon’s role as a selling platform allows it to gather all sorts of information, such as consumers’ browsing history, purchasing history, and shopping carts, which are all invaluable in helping Amazon make business decisions, but the problem is that Amazon is also a competitor of its third-party sellers, and some of the information collected is about the products produced by those small companies, so it would be unfair if Amazon use the information to improve its own products and services or even to develop new strategies in order to surpass its competitors.
According to Vestager, the collection of data of Amazon could, on one hand, be ‘completely legitimate’ if it is only used for improving services provided to the third party sellers, while on the other hand, Amazon may have violated the anti-trust rules if it uses the data for the purposes of improving its own products and services against its rivals. Still, Vestager claims that the EC is just trying to understand the situation and it has not formally opened a case, but it is possible that Amazon may have to pay a fine of up to 10% of its global turnover if the investigators find concrete evidence for conviction.
