New EU investigation into Amazon may result in huge fine

European Commissioner Margarethe Vestager is opening an official inquest into Amazon, which she believes is treating the sellers on its platform unfairly.

Unfair data use

After calling out Google and Facebook, Vestager has now turned her anger towards Amazon: the European Commission will be launching an investigation into “possible anti-competitive behaviour” on the part of the American online giant. The problem is with Amazon’s double role, since the company acts both as a marketplace for traders and as a trader itself.

As a marketplace for independent sellers, Amazon constantly collects data on the activities on its platform. The European Commission claims there are signs that imply that the company uses information which is competitively sensitive. More precisely, it would be collecting data on the sellers, their products and the transactions on the marketplace, all of which is accessible only to Amazon… and the company is suspected of using that data in its capacity as a direct seller itself.

Is the company misusing that information against those same “partners”? And is it using that data from traders to its own advantage? Europe wants to find out whether or not Amazon has an unfair advantage this way. EU Commissioner Vestager has said that the investigation has been opened with priority, but in a press release the EU emphasises that there is no legal deadline for finishing up the investigation.

Amazon adjusts contracts

Amazon has just now made a deal with the German and Austrian competition authorities, which are conducting their own investigation. In those countries, the issue was also the agreements between Amazon and its marketplace partners, but more focused on the position of those sellers compared to the powerful American company.

It should not come as a surprise that Amazon has adjusted its marketplace contracts in light of this – not only in Germany, but also in other markets where the Seattle-based giant has a presence. For example, sellers can no longer be removed without a notice of thirty days and traders can now sue Amazon in their own country (which was previously only possible in Germany). Futhermore, the company has promised more transparency in the way products and reviews are shown. These changes will be implemented mid-August.

German authorities have expressed their willingness to drop the investigation, after these “far-reaching improvements”. Amazon, on its turn, promises to keep working hard on new tools and services to help its sales partners around the world. The American giant also promises to co-operate with the new European investigation.