EU Starts Preliminary Probe of Amazon's Treatment of Merchants -- Update
September 19 2018 - 11:34AM
Dow Jones News
By Sam Schechner and Valentina Pop
European Union antitrust authorities have opened a preliminary
investigation into Amazon.com Inc.'s treatment of other merchants
that sell products using its platform, starting a new regulatory
front against an American tech giant.
EU Competition Commissioner Margrethe Vestager said Wednesday
that investigators recently sent out questionnaires to merchants
who use Amazon to sell goods as part of the preliminary probe. The
investigation focuses on whether Amazon is using customer data it
gathers via billions of transactions in ways that smaller merchants
selling the same products on Amazon might not be able to do, Ms.
Vestager said.
"The question here is about the data," Ms. Vestager said, adding
that the investigation was in its "very early days" and that her
office has "no conclusions" about whether to open a formal
probe.
A spokesman for Amazon didn't have any immediate comment.
As the EU's antitrust chief, Ms. Vestager has emerged as one of
the world's major technology regulators, helping inspire
investigations into tech companies from Brazil to the U.S. Most
recently, she fined Alphabet Inc.'s Google twice, for a total of
roughly EUR6.76 billion, for allegedly abusing the dominance of its
search engine and Android operating system to favor its own
services -- decisions the company has either appealed or said it
would appeal.
Under her watch, the EU also ruled that Amazon must pay some
EUR250 million in allegedly unpaid taxes to Luxembourg, something
Amazon has also appealed.
Ms. Vestager has made no secret of her desire to find cases that
could determine whether companies are abusing the data they amass
to thwart competitors. Indeed, it is one of the hotter topics in
competition law in recent years. Some lawyers argue that data is
fungible and replicable, but others contend that its use to nourish
self-learning software and artificial intelligence can confer a
lasting advantage to bigger firms.
So far, the EU hasn't found data problems. The bloc raised the
issue when considering Facebook Inc.'s 2014 purchase of chat
service WhatsApp, but later cleared it as posing no competition
issue. In 2008 it approved Google's acquisition of
advertising-services company DoubleClick, because other companies
would still have access to many sources of data after the
mergers.
The Amazon marketplace investigation follows up on concerns
raised by retailers in the course of an e-commerce sector inquiry
of 2017 about so-called "dual-role" platforms. A typical example
for such a dual-role platform is Amazon which, on the same website,
offers marketplace services to third-party sellers and sells
products as an online retailer, in direct competition with those
third-party sellers.
Amazon might thereby gain access to competitively sensitive
information about competitors' products that it could use to boost
its own retail activities at the expense of third-party sellers on
its marketplace. The purpose of the preliminary investigation is to
verify whether these concerns have any merits and need to be
followed up.
One copy of a questionnaire sent in recent days, the
authenticity of which was confirmed by a person familiar with the
probe, asked retailers the importance and availability of certain
data, such as competitors' return rates, and also sought examples
where Amazon offered products that compete with a third-party
merchant's.
Some Amazon marketplace sellers contacted Wednesday had not yet
received questionnaires from the EU, but expressed support for the
inquiry. One major seller in Europe who declined to be named
complained that Amazon had raised fees for selling media products
by as much as 50% in some countries, but said that Amazon was so
big he had no choice but to continue using it.
Christian Mayrhofer, chief executive of Dodax AG, a
Switzerland-based merchant that makes about half of its revenue on
Amazon, said that the platform has undercut his own sales, while
charging higher fees to third-party sellers.
"We are more and more moving onto our own site and trying
alternative platforms," Mr. Mayrhofer said. "But in all honesty
there is nothing that can compete against Amazon."
The Amazon spokesman didn't immediately have any comment about
seller concerns.
Write to Sam Schechner at sam.schechner@wsj.com and Valentina
Pop at valentina.pop@wsj.com
(END) Dow Jones Newswires
September 19, 2018 11:19 ET (15:19 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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