Amazon hit by EU complaint, faces new probe over sales

Brussels

AMAZON.COM became the European Union's latest Big Tech target as regulators escalated a case into how it uses rivals' sales data on its platform and added a new probe into whether it unfairly favours its own products.

The European Commission said it suspects Amazon violated antitrust rules over its use of non-public business data from independent sellers on its marketplace that could benefit the company's own retail arm. The EU regulator will also probe how Amazon chooses products for a prominent "buy box" and whether Amazon pushes retailers to use its own logistics and delivery services.

"We do not take issue with the success of Amazon or its size," Margrethe Vestager, the EU's antitrust commissioner, told reporters at a press conference in Brussels on Tuesday. She said the EU's concerns focus on "very specific business conduct" linked to Amazon's dual role as a retailer and a platform for smaller merchants.

An EU statement of objections for Amazon raises the risk of potential fines or a possible order for it to change business practices. Ms Vestager has been ramping up scrutiny of many other big tech firms, adding probes into Apple Inc and Facebook Inc as well as some US$9 billion in fines for Google. Regulators are also weighing new rules for online giants that critics say run a rigged game when they set the rules for platforms that also host their competitors.

Amazon disagrees with the EU's assertions and "will continue to make every effort to ensure it has an accurate understanding of the facts," it said in an emailed statement.

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Amazon shares slid more than 2 per cent in premarket trading.

"Amazon represents less than one per cent of the global retail market, and there are larger retailers in every country in which we operate," the company said.

"There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually and have created hundreds of thousands of jobs."

While Amazon's global sales last year were US$280.5 billion, any fine is likely to be far less than the 10 per cent of annual revenues the EU could levy - and would be based on sales in European markets. Amazon made US$22.2 billion in Germany and US$17.5 billion in the UK in 2019.

Amazon has around three million active merchants selling products on its site, with around a third of those in Europe, according to a 2019 report by e-commerce analysis firm Marketplace Pulse. The EU warned last year it was probing suspicions that Amazon could spot best-selling products and start stocking the same thing itself - essentially cherry-picking the most profitable or high-volume goods.

Regulators say the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and allows it to abuse a dominant position as an online host for merchants in France and Germany. Amazon's retail arm can access "very large quantities of non-public seller data" which flow into automated systems that can calibrate Amazon's own retail offers. That can help Amazon make "strategic business decisions" that might harm other sellers.

The new investigation focuses on the "buy box" where Amazon highlights sellers of a particular product. Some 80 per cent of sales go to the winner of the buy box, Ms Vestager said. BLOOMBERG