EU charges Amazon for antitrust violations

European regulators has formally announced antitrust charges against Amazon on Tuesday. The Financial Times was the first to report the news.

At the crux of the case is Amazon's position as a retailer that sells goods but also acts as a marketplace for third-party vendors. The European Commission will likely charge Amazon for abusing the data it has gathered on these third-party companies to better compete with them.

The charges stem from a probe launched in July 2019. The Commission said at the time it will investigate the agreements between Amazon and marketplace sellers, which allow Amazon's retail business to analyze and use third-party seller data, as well as the role of that data in the selection of retailers included in Amazon's "Buy Box," which allows buyers to add items from a specific retailer directly into shopping carts.

On Tuesday, the Commission said that its preliminary findings show that "very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers."

Amazon declined to comment on FT's story.

“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. 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. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers,” Commissioner Margrethe Vestager said in a statement.

Amazon has also been under scrutiny for possible antitrust violations in the U.S. But the EU has historically been tougher when it comes to actually imposing fines on tech giants for antitrust violations. Vestager's past investigations into Google and Apple ended up in massive fines for these companies.

UPDATE: Nov. 10, 2020, 2:34 p.m. CET The article has been updated with more information after the European Commission formally announced the news.