Will the EU’s anticompetitive investigation follow Amazon back to the U.S.?
It’s long been alleged that Amazon.com uses data from third-party sellers on its marketplace to its own advantage. It has been claimed that Amazon discovers hot sellers, adds those items to its own inventory and then prices the products at points that its marketplace merchants can’t match. Now, the European Union is investigating the allegations and, if found to have merit, the repercussions could extend across the Atlantic for the e-tailing giant.
In response to a reporter’s question at a press conference on Wednesday, Margrethe Vestager, head of the EU’s Competition Commission, said that the agency had begun “preliminary” fact finding on Amazon’s use of data to see if it crossed an anticompetitive line.
Ms. Vestager described the investigation as “in the very early days” with the agency having sent out “quite a number of questionnaires to marketplace participants to understand this issue in full.” She emphasized that no formal investigation had been launched into Amazon’s practices and whether they constituted anticompetitive activity.
“The question here is about the data. Because if you as Amazon get the data from smaller merchants that you host, which can be perfectly legitimate because you can improve your service to these smaller merchants,” said Ms. Vestager. “But do you also use this data to do your own calculations as to what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things?”
In 2014, Upstream Commerce conducted a study to determine if Amazon was using data from marketplace sellers to game the system. Upstream tracked 857 women’s clothing products initially sold by third-party sellers, but not Amazon. It found that within 12-weeks, Amazon had begun selling 25 percent of the top items first sold on its marketplace.
The EU’s investigation into Amazon’s use of third-party seller data comes at a time when the e-tail giant finds itself dealing with unwanted attention from political critics pursuing ideological and personal agendas.
Sen. Bernie Sanders has criticized Amazon for its employee compensation practices and “dangerous” work environments, charges disputed by the company.
President Trump, unhappy over Washington Post coverage of himself and his administration, has made unsupported claims about Amazon not paying state sales taxes and receiving special U.S. Postal Service deals. Amazon CEO Jeff Bezos owns the paper, which is not affiliated with the e-tailer.
- Live EC press conference by Commissioner Margrethe Vestager on Luxembourg McDonald’s State Aid case – European Commission
- Study: Amazon goes all predatory on marketplace sellers – RetailWire
- Amazon tries to deflect political attacks – RetailWire
DISCUSSION QUESTIONS: Should Amazon be worried about the EU investigation into its use of marketplace seller data? Do you see a similar investigation taking place in the U.S.?