Brussels Investigates Amazon For Possible Abuse With Customer And Supplier Data

Brussels Investigates Amazon For Possible Abuse With Customer And Supplier Data

The European Commission opens a formal investigation after noting that the company could be taking advantage of information from companies that use the platform.

Brussels opens another front against the great American technology giant. After nine months of preliminary inquiries, the European Commission has decided to open an investigation to the online retail giant Amazon for alleged practices that could put Jeff Bezos’ firm in a position of market abuse.

The department led by the Danish Margrethe Vestager analyzes whether the company has been using sensitive information from the companies that use that platform for their sales to do their own business calculations, which would give it a huge advantage over its competitors.

The European Commission has been focusing for months on the possible abuse that large corporations can make of the data of their customers, both companies and end-users. The information that consumers leave on any platform can be a valuable source of business, especially if it is obtained illegally. Therefore, Vestager already commissioned a report to a group of experts on how to arm them to prevent monopolies in access to data from becoming a barrier to market access.

The case of Amazon was opened last September with the sending of questionnaires to various market players. After examining the results of that survey, the Commission already has well-founded suspicions that the Seattle firm may be using “sensitive data from independent sellers” that Amazon uses to reach its consumers.

“Ecommerce has driven competition in commerce and allowed for a greater variety of choice and better prices, we need to ensure that large online platforms do not eliminate these benefits through anti-competitive behavior. A representative for the organization stated: “We will participate completely with the European Commission and we will keep on endeavoring to help organizations everything being equal and help them develop.”

The giant is an online seller, but also a huge showcase and market in which merchants advertise and sell their products. About this second activity focuses on the investigation of Competition, since the inquiries made so far suggest that Amazon, which is “continuously collecting data”, could use information about the companies, their products and their transactions for their own commercial strategy, according to community sources.

Agreements with customers:

The in-depth investigation will focus on two activities. The first consists of the standard agreements that Amazon may be reaching with its customers that allow the platform to “analyze and use” the merchants’ data. In particular, the Commission will examine that the company is not taking advantage of the accumulation and systematization of this information.

The second leg of the investigation has to do with the operation of the Buy Box service. Normally, when a consumer accesses a selected product on Amazon, it lands directly on the so-called “detail page”, which sets the characteristics of a vendor’s offer for that product. Then select it, place it in the basket and keep buying.

The Buy Box system is an automated mechanism that preferentially shows a specific product, which can be purchased directly through that option without having to give all the steps above. Therefore, getting a Buy Box has become a key for many sellers, since most consumers end up opting for that offer. And that affects the competition in that big market that Amazon has become.

The Commission has indicated that the opening of the investigation does not predetermine the result. However, if it is proven that these activities constitute market abuse, Competition could prohibit these practices and impose a fine that could reach up to 10% of the billing of the platform.

Brussels is investigating several of the companies that make up the group:

Amazon.com Inc., Amazon Services Europe SARL, Amazon EU SARL, Amazon Europe Core SARL and all entities directly or indirectly controlled by them.

Amazon’s problems with the use of data with independent sellers have also been the subject of research in countries such as Germany and Austria. This Wednesday, precisely, the German Competition Authority has reached an agreement with the technology that improves the conditions of independent sellers in the Amazon platform. “We left our investigation,” said Andreas Mundt, director of the anti-cartel office.

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I am Sofia Mendela. My passion is to write about new businesses, leadership and capture interesting stories. I am quick in research and craft better stories.

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