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European Commission Says Amazon Breached Antitrust Rules; Opens Second Formal Investigation

(RTTNews) - The European Commission, the executive arm of the European Union, said Tuesday it has informed Amazon of its preliminary view that the e-commerce giant breached European Union or EU antitrust rules by distorting competition in online retail markets.

The Commission said it has taken issue with Amazon systematically relying on non-public business data of independent sellers who sell on the company's marketplace, to the benefit of Amazon's own retail business that directly competes with those third party sellers.

In addition, the Commission said it has opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

"We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. 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," said EU's Executive Vice-President Margrethe Vestager, in charge of competition policy.

The Commission noted that Amazon has a dual role as a platform. It provides a marketplace where independent sellers can sell products directly to consumers, and it also sells products as a retailer on the same marketplace, in competition with those sellers.

As a marketplace service provider, Amazon has access to non-public business data of third party sellers, including the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, and data relating to shipping.

The Commission said its preliminary view, outlined in its Statement of Objections, is that Amazon's use of non-public marketplace seller data allows the company to avoid the normal risks of retail competition and also leverage its dominance in the market for providing marketplace services in France and Germany- the biggest markets for Amazon in the EU.

If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union or TFEU, which prohibits the abuse of a dominant market position, the Commission noted.

The Commission will now carry out its in-depth investigation as a matter of priority and said that the opening of a formal investigation does not prejudge its outcome.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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