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European Commission Charges Amazon Over Abuse Of Third-Party Sellers

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An investigation has reached a preliminary conclusion on claims that Amazon broke anti-trust rules and illegally distorted competition in the online retail sector, and has confirmed a second investigtaion will also take place into Amazon's ecommerce practices.

The European Commission has ruled that Amazon abused its dominant market position to gain an unfair advantage over its competitors in an investigation that began in July 2019.  Amazon is understood to have aggregated detailed, real-time data relating to third party seller listings and transactions to feed into its algorithm, helping to determine its own prices, inform new product development and manage inventory.

Amazon's EU marketplace was the focus of the investigation, specifically France and Germany.

The investigation revealed that by aggregating the data from 800,000 EU sellers, Amazon was able to circumvent the risks that other retailers would have to take when making pricing decisions or investing in new products.  The EC revealed that in many popular product categories, Amazon accounts for more than half of the revenue generated by those products, but lists less than 10% of the items available in said catgeories.

Amazon will be able to respond to the EC's conclusions in the near future and could face a large fine. 

An Amazon spokesman said: “We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts.

“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate.

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”

Statement from the European Commission:

The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.

The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “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.”

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Source : Insight DIY Team and European Commission

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11 November 2020

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Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.

Martin Elliott. Chief Executive - Home Hardware.

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