EU To Investigate Amazon’s Practices Over Treatment Of Small Retailers

After France decided to impose a tax on tech giants for revenues made in the country – which would impact American tech companies such as Google and Facebook, and Britain introducing a very similar bill in its parliament, a formal investigation into some activities of the American e-commerce giant Amazon has been now launched by the European Union.

Hence the United States tech giant is set to face the regulators on another front.

The EU and the European commissioner for competition, Margrethe Vestager wants to take “a very close look” on the question of whether EU anti-trust rules had been violated by the business practices of Amazon, Vestager said while announcing the decision of the launch of the investigation.

The US and its president Donald Trump’s administration is already irked by the decision of France and Britain to push ahead with taxes on large tech companies – which the US claims are particularly targeted at American tech companies. And analysts anticipate that the Trump administration would be provoked further by the decision to investigate Google. It was just a few weeks ago that  Donald Trump said Vestager “hates the United States perhaps worse than any other person I’ve ever met”.

Vestager, the Danish commissioner of the administrative arm of the EU, is known to have taken tough stand and actions against US tech companies such as Google and Apple following the conclusion by the Commission’s regulatory body that the companies had either abused their market power and dominance or had tried to use loopholes in the EU laws to underpay corporate taxes. Allying the concerns and allegations by the US of targeting American companies, the European Commission has clarified on multiple occasions that its aim of actions against US companies is by coincidence and at preventing anti-competitive behaviour and not on using the EU laws to take action against companies on the basis of their nationalities.

The agreements between Amazon and the thousands of independent retailers who use its e-commerce platform to sell their goods would be at the centre of the latest investigation by the EU. Amazon appeared to use “competitively sensitive information” from those independent retailers, the commission said, following a preliminary investigation launched last year.

The manner in which these agreements impact free competition would be studied by the Commission during the formal investigation that was launched on Wednesday. The focus of the investigations would be on Amazon’s “buy box” that gives the customers the choice of adding products from a specific retailer directly into their shopping carts.

“E-commerce has boosted retail competition and brought more choice and better prices,” Vestager said. “We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour.

“I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”

The commission said the announcement of the investigation did not prejudge the outcome.

(Adapted from TheGuardian.com)

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