EU Investigating if Amazon is Using Data to Unfairly Compete With Third-Party Sellers

Sep 28

The European Union is on the prowl again in a likely attempt to win cash and concessions from Amazon. This is another investigation in a long string of investigations into American companies designed to extract big cash payments.

European Commissioner for Competition, Margrethe Vestager, indicates that the issue is the possible use of third-party seller data by Amazon to determine which products it might decide to produce and sell itself, thus competing and presumably putting out of business the other sellers of that product. Vestager admits that there have been no formal complaints from resellers but they “have people” coming to them and asking questions about this issue.

European Commissioner for Competition, Margrethe Vestager discussed their investigation on CNBC’s Closing Bell:

EU Suspects Amazon Is Using Data to Compete With Third-Party Sellers

It’s too early to have a concern but we like to understand how this is working because Amazon has this dual role, they host a lot of little guys and enabling them to do e-commerce which is a great thing, at the same time they’re a big guy in the same market. How do they treat the data that they get from the little guy? Does that give them an advantage that cannot be matched or how to understand this?

We have concerns from the marketplace and we have seen this also in a sector-wide inquiry so so we’re very interested to learn also in deep detail how this works.

There Are No Formal Complaints Filed From Third-Party Sellers

One thing is to enable the little guy to do business. It’s another thing that once you have enabled it and you see how it works in the marketplace basically you take it and because you’re a big guy you do large scale so you can sort of occupy that marketplace yourself. We have people coming to us with concerns but no formal complaints have been filed from third-party sellers.

The EU Already Settled an eBook Case with Amazon

We have already had one Amazon case on eBooks, on German and English spoken eBooks. We saw that Amazon was saying if you as one of our suppliers do something innovative, if you lower your prices or something like that, you always have to give us the same benefit and that, of course, made it very difficult for the eBooks market to innovate.

If you always have to give Amazon whatever you have then of course that puts a lid to innovation. That we solved in a settlement actually covering ebooks in almost all segments.

Not Opposed to Amazon but We Have Questions

It’s important that the price point is right because for many people on a low budget, of course, low prices is of the essence and enabling choice is a great thing. We also want to see that innovation is thriving because being a customer in an innovative marketplace is, of course, better than being a customer in a non-innovative marketplace.

This is what we’re trying to understand how does this work and of course, it may turn out that we have no further questions to be asked but that remains to be seen.

EU Commision Meeting With US FTC

We’ve had a very good meeting today with Federal Trade Commission Chairman Joseph Simons and others from the FTC, and we didn’t discuss in any detail these questions. What we discussed is our cooperation which is actually very good because we exchange views, but we don’t try to walk in each other’s shoes.

Status of the Google EU Investigation

Of course, we expect a change of behavior because the decision is a cease-and-desist decision, you have to stop this and you cannot put anything in its place that has an equivalent effect. This is about enabling choice for the ones who produces our phone so that that maybe you can have a phone that carries other apps when you have the out-of-the-box experience.

That is important for us to see this change in the marketplace to show that those who actually have the skills maybe to do another operating system from the Android open source code that they may be able to do that. The fine will have to be paid and then of course it is for Google to decide if they will appeal the case or not.



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