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Amazon faces fresh legal battle in Austria as European regulators probe 'dual role'

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Austria is the latest country to open a probe into Amazon's business practices.
Austria is the latest country to open a probe into Amazon's business practices.

An Austrian regulator has launched an investigation into Amazon for allegedly violating competition law.

 

The country’s Federal Competition Authority (BWB) said it would assess whether Amazon had abused its dominant position in the country to discriminate against traders on its platform.

 

The investigation follows complaints filed by the country’s trade association for retailers, Handelsverband, in December.

 

Complainants claim that Amazon discriminates against other retailers in order to boost its own products on the marketplace.

 

Alleged abuses include abruptly terminating seller accounts, forcing sellers to disclose purchase prices and sellers unjustly losing their product ranking.

 

Amazon is also accused of adding incorrect delivery details to seller accounts.

 

If found guilty, Amazon could face new obligations or a fine. The regulator will work with its counterpart in Germany, which launched a similar investigation in November 2018. It plans to carry out a market survey as part of the investigation.

 

Theodor Thanner, director general of the BWB, said: “The digital world is not a legal vacuum. Companies operating on a global scale must adhere to applicable Austrian laws and regulations.”

 

Amazon made around €690 million in sales in Austria in 2017. According to Handelsverband, the company’s “dual role” is the main problem. As Rainer Will, MD of Handelsverband, commented in December, the company is not only a classic online retailer but also the largest marketplace.

 

Part of this issue is the vast trove of data which Amazon has on sellers. The marketplace can potentially analyse data on thousands of products and use this to strengthen its own range of brands.

 

In September 2018, the European Competition Commissioner Margrethe Vestager announced it was in the “very early stages” of a probe into this use of data.

 

“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.

 

The regulator is gathering information and has sent a number of questionnaires to market participants.

 

Responding to the announcement, Amazon said in an emailed statement: “Please understand that we do not comment on ongoing proceedings. However, we will cooperate fully with the Austrian competition authority and continue working hard to support small and medium-sized businesses and help them grow."

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