The European Union announced it is opening a second antitrust investigation into the online retail giant Amazon and announced its preliminary conclusions into its first investigation on Tuesday.
“The Commission opened a second antitrust investigation into Amazon’s business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon’s logistics and delivery services (the so-called ‘fulfilment by Amazon or FBA sellers’),” the EU’s European Commission wrote in a press release.
The commission’s second investigation will focus on whether factors used to select which sellers and products are featured in the “Buy Box” and to offer recommended products to Prime users “lead to preferential treatment of Amazon’s retail business or of the sellers that use Amazon’s logistics and delivery services.”
The Buy Box is the area on a product page underneath where users can add the product to their Amazon cart. It displays similar products from competing sellers and from Amazon’s in-house brands.
The investigation will cover the entire European Economic Area except for Italy. The Italian Competition Authority initiated an investigation into Amazon’s practices in the Italian market last year, and the investigation has not been completed. Though the commission will not investigate in Italy, “the Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.”
In the same press release, the EU revealed its “preliminary view” from its first antitrust investigation found that Amazon “has breached EU antitrust rules by distorting competition in online retail markets.”
“The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon’s own retail business, which directly competes with those third party sellers,” the commission wrote.
European Commission Executive Vice President Margrethe Vestager shared the EU’s findings on Twitter.
“We reached the preliminary conclusion that @amazon illegally has abused its dominant position as a marketplace service provider in [Germany] & [France],” Vestager tweeted Tuesday morning ahead of a press conference. “@Amazon may have used sensitive data big scale to compete against smaller retailers.”
We reached the preliminary conclusion that @amazon illegally has abused its dominant position as a marketplace service provider in DE & FR. @amazon may have used sensitive data big scale to compete against smaller retailers. Now for @amazon to respond. @EU_Competition
— Margrethe Vestager (@vestager) November 10, 2020
The preliminary conclusion does not mean the investigation has ended. Announcing a preliminary conclusion and sharing its determination with Amazon gives the retail giant an opportunity to respond to the charges before further action is taken.
A spokesperson for the European Commission told the Washington Examiner that the commission does not have a timeline for when they expect either investigation to be completed. It took more than a year for the first investigation to reach its preliminary conclusion after being announced in July 2019, but given the similar nature of the two investigations, the second investigation may be able to move more quickly.
Amazon has several weeks to respond to the preliminary conclusion.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Vestager said in a statement. “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. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services.”
The Washington Examiner reached out to Amazon for further comment.
