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EU probes Amazon over use of seller data

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The European Commission (EC) has opened an antitrust probe into Amazon to determine whether it is using “sensitive” seller data in an anti-competitive way.

The investigation focuses on Amazon’s “dual role” as a platform, in which it operates both as a retailer selling its own products and provides a marketplace for third party sellers. The concern is that Amazon may unfairly use seller data to enhance its retail offering.

The probe will look into the agreements that Amazon has with third party sellers which allow it to analyse data, as well as how this use of data affects competition.

It will also examine how potentially sensitive data is used to select the winners of Amazon’s “Buy Box”, a prominent box which allows customers to add items from a specific retailer directly into their shopping carts.

The EC said that Amazon’s behaviour may violate Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements that could disrupt free competition and Article 102, which relates to abusing a dominant position.

Commissioner Margrethe Vestager, in charge of competition policy, said: “European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices.

“We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. 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.”

Vestager gave more detail in September 2018: “You have these platforms that have a dual purpose; they are both hosting a lot of merchants to maybe enable a smaller guy to allow his business to be found and do his commerce. At the same time, they are merchants themselves – big merchants.

“The question here is about the data. If you as Amazon get the data from the smaller merchants that you host, which could of course be completely legitimate because you can improve your service for these smaller merchants.

“Do you then use this data to do your own calculations into what is the next big thing, what is it people want, what kind of offers do they like to receive, what makes them buy things.”

Responding to the opening of the probe, Amazon said: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”

In February, Austria’s Federal Competition Authority opened an investigation into whether Amazon had discriminated against traders on its platform.

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