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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