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Amazon faces £15bn fine as EU charges it with breaking competition laws

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Amazon charged by the EU (Image: AdobeStock)
Amazon charged by the EU (Image: AdobeStock)
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EU takes Amazon to task claiming it used data improperly and gave preferential treatment to some sellers – it denies the charges

The European Commission has charged Amazon with breaking competition rules, saying that the retail giant used data on third-party sellers that use its marketplace to gain an advantage over competitors, as well as offering preferential treatment to merchants that used its logistics and delivery services

 

Amazon strenuously denies the charges, which could land it with a fine of 10% of its global turnover – some £15bn.

 

The EU’s competition commissioner Margrethe Vestager says: “Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. With ecommerce booming, and Amazon being the leading ecommerce platform, a fair and undistorted access to consumers online is important for all sellers.”

 

Countering the accusations, Amazon issued a statement saying: “Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate. No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”

 

Commenting on the EU’s long anticipated move, Cas Paton, founder and CEO of online marketplace, OnBuy, says: “On behalf of every business which trades through eCommerce platforms, I am delighted to see that the European Commission has today taken the first step to address Amazon’s monopoly on the eCommerce market. While Amazon can try to argue that it has offered consumers more, not less, choice, I have personally heard many reports by sellers that Amazon has undercut their prices, sourced identical products and strangled their sales opportunities. Ecommerce platforms should be designed to support small business, not to trample upon them to line their own pockets.”

 

Paton continues: “During the first UK lockdown, when many small businesses were fearing for their future and should have been able to benefit from the surge in online shopping, Amazon put its sellers at a disadvantage, crippling their cash flow by restricting sales of ‘non-essential’ product ranges in favour of retailing their own products.”

 

He adds: “Traders and sellers have been campaigning for over a year for Amazon’s monopoly to be addressed. We need to see change before Amazon’s policies bring about the demise of many SMEs which sell through the platform.”

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