Amazon faces EU antitrust charges
The European Commission plans to formally charge Amazon with a monopoly over the attitude of the American online giant to sellers on its platform. It is reported by The Wall Street Journal, citing people familiar with the situation. According to one of them, this can happen next week or at the end of June.
The investigation of the EC lasted two years, and the European Commission prepared a draft version of the charges a couple of months ago, another source said. The problem is Amazon's conflict of interest, which simultaneously acts as a seller and platform operator. According to Brussels, the company gains an unfair advantage by collecting and analyzing data from other sellers to compete with them. For example, if products are in demand, Amazon begins to sell similar products under its brand, and even at lower prices.
Back in April, the Wall Street Journal released an extensive article, claiming that Amazon has been using the third-party's data gathered on its platform to develop and promote their own-brand products. This has caused quite an uproar in the US amongst the lawmakers and big-tech critics, as Amazon has officially testified to the House Judiciary Committee in July that it does not partake in such practices.
Senator Elizabeth Warren and Congressman David Cicilline have commented on the issue by stating that: - "At worst, the witness Amazon sent to speak on its behalf may have lied to Congress ... we need to break-up big tech".
According to Business Insider, following the release of the article and a growing wave of criticism Senator Josh Hawley has called for a criminal antitrust investigation into Amazon's reported use of third-party sellers' data. In his letter to Attorney General William Barr, Hawley said Amazon "has engaged in predatory and exclusionary data practices to build and maintain a monopoly". He highlighted the importance of the investigation, given the current situation: -"... at a time when most small retail businesses must rely on Amazon because of coronavirus-related shutdowns, predatory data practices threaten these businesses' very existence". In the future, such a situation, where small businesses are either forced out of the market due to not being represented on big e-commerce platforms due to fear of data breaches or their product being replicated by the said platforms could lead to the increased vulnerability of consumer due to the limited choice.
Amazon has issued a statement to Business Insider: - "We strictly prohibit employees from using non-public, seller-specific data to determine which private label products to launch. While we don't believe these claims made by the Wall Street Journal are accurate, we take these allegations very seriously and have launched an internal investigation."
Despite the Amazon denying its involvement in such anti-competitive practices, we can now see that the scrutiny of the company and its methods is increasing in its scope.