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EU opens probe into Amazon use of sensitive data

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EU opens probe into Amazon use of sensitive data

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(BRUSSELS) - The European Commission opened a formal investigation Wednesday into whether Amazon's use of sensitive data from independent retailers selling on its 'marketplace' breaches EU competition rules.

While acknowledging the importance of e-commerce in boosting retail competition online, with more choice and better prices, Competition Commissioner Margrethe Vestager said large online platforms must not "eliminate these benefits through anti-competitive behaviour." She said the Commission was going to take "a very close look at Amazon's business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules."

While the Amazon platform sells products on its website as a retailer, it also provides a marketplace where independent sellers can sell products directly to consumers.

When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform.

The Commission says that based on its preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace.

As part of its in-depth investigation the Commission is to look into:

  • the standard agreements between Amazon and marketplace sellers, which allow Amazon's retail business to analyse and use third party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
  • the role of data in the selection of the winners of the "Buy Box" and the impact of Amazon's potential use of competitively sensitive marketplace seller information on that selection. The "Buy Box" is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the "Buy Box" seems key for marketplace sellers as a vast majority of transactions are done through it.

If proven, the practices under investigation may breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU).

The Commission says it will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.

More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40462.


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