The European Union has unveiled formal antitrust charges against Amazon for abusing its dominance in online shopping and opened a second investigation into the company’s business practices. Margrethe Vestager, the European Commission’s top antitrust official, accused Amazon on Tuesday of illegally abusing its dominant position as an online marketplace in Germany and France, the company’s biggest markets in the European Union.

The Commission opened a formal investigation into Amazon in July 2019 to probe its dual role as marketplace and retailer. It has been looking into agreements between Amazon and independent retailers, and whether data from sellers is being unfairly used by the e-commerce giant, which also sells its own products.

The investigation found that Amazon feeds non-public seller data, such as the number of products ordered and the sellers’ revenues, into its own retail algorithms to help it decide which new products to launch and the price of each new offer, Vestager said on Tuesday. That allows Amazon to marginalize third-party sellers and cap “their ability to grow,” she added.

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” the e-commerce giant said. The commission’s second antitrust investigation will look at how the company chooses which sellers offer products via Amazon Prime, its paid-for premium service. It will investigate the possible preferential treatment of Amazon’s own retail business and those that use its logistics and delivery services (known as “fulfilment by Amazon” sellers) over other sellers.

It will also look into the Amazon’s “buy box” function, which offers customers a one-click button to add a product to their shopping cart. U.S. regulators and third-party sellers have previously questioned Amazon over which products get placed in the all-important buy box. Amazon maintains that the buy-box features the offer it thinks customers will prefer overall, while factoring in things like price, delivery speed and Prime.

Vestager said that, while going through 80 million transactions and 100 million products listed on Amazon marketplace, “it became increasingly clear that there might something that we should look into further on the buy box.” Now the company will have the chance to examine the commission’s conclusions and reply in writing or via an oral hearing.

Todd Horwitz Chief Strategist BubbaTrading.com
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