Amazon has come under scrutiny over its dual role as a marketplace for merchants as well as their competitor.
In a significant development, antitrust regulators in the European Union are increasing their scrutiny on Amazon over its usage of merchants’ data. The development underscores increasing regulatory scrutiny over how tech companies exploit customers’ information.
Facebook, Google, and Amazon are among the U.S. tech giants which have come under regulatory scrutiny over complaints that academics and rivals over their usage of merchant data to boost their market power.
This has led to calls of them being broken up.
Since September 2018, the European Commission has been requesting feedback from retailers and manufacturers over Amazon’s dual role as a marketplace for merchants and as a competitor.
Merchants have complained over the harm caused by Amazon copying their products.
According to the European Commission, its investigation will focus only on two issues. The first is Amazon’s standard agreements with marketplace sellers; and the second is its usage of data in choosing winners of the “buy box”, which allows consumers to add items from a specific retailer directly into their shopping carts.
According to European Competition Commissioner Margrethe Vestager, the issue is critical since more and more Europeans shop online.
“E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior,” she said.
Amazon stated, it would cooperate fully with the EU investigation.
Incidentally, the European Commission has been struggling to define the market in which Amazon operates in order to identify where the competitive harm could have been, said sources. They went on to add, the issue was whether to look at Amazon in the overall retail market or in its own niche.