Austria opens Amazon antitrust probe over sellers discrimination

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The Austrian Federal Competition Authority (BWB) has launched an Amazon antitrust probe over alleged abuse of their dominant position in the country to discriminate against sellers on their marketplace.

The investigation aims to examine Amazon’s ‘dual role’ as a retailer and marketplace platform for allegedly violating competition law.

The BWB said to receive complaints from “a high double-digit number” of stores via Austrian trade association of retailers, in December. Complaints say that Amazon discriminates against other merchants in an attempt to boost their own products on the marketplace. Reported abuses include terminating merchants’ accounts, forcing them to disclose sale prices, sellers losing their product ranking as well as adding Amazon adding incorrect delivery details to seller accounts.

The digital world is not a legal vacuum. Companies operating on a global scale must adhere to applicable Austrian laws and regulations. The outcome might be commitments, an application for a fine or an application for termination of infringements to the Cartel Court.”
–  Theodor Thanner, director general and head, BWB 

Amazon could face new obligations or a fine if found guilty. The BWB will work with German antitrust authority, which opened a similar investigation in November 2018. They plan to launch a market survey as part of the probe.

Handelsverband retail association says that Amazon’s own revenue in Austria was about €690m (£606m) in 2017. Austria merchants sell on the marketplace around €700m (£614m) worth of goods.

European Competition Commissioner, Margrethe Vestager the significant amounts of data that Amazon has on their sellers. She questioned whether the marketplace abuses the data or uses it to improve merchants’ trading on Amazon.

You have these platforms that have a dual purpose; they are both hosting a lot of merchants to maybe enable a smaller guy to allow his business to be found and do his commerce. At the same time, they are merchants themselves – big merchants. The question here is about the data. If you as Amazon get the data from the smaller merchants that you host, which could, of course, be completely legitimate because you can improve your service for these smaller merchants. Do you then use this data to do your own calculations into what is the next big thing, what is it people want, what kind of offers do they like to receive, what makes them buy things.”
– Margrethe Vestager, European competition commissioner

Tamebay contacted Amazon on the issue. Here is what they said:

Please understand that we do not comment on ongoing proceedings. However, we will cooperate fully with the Austrian competition authority and continue working hard to support small and medium-sized businesses and help them grow. And here is additional content regarding the seller business in general. Amazon succeeds when sellers succeed. Sellers delight our customers every day with a vast selection, convenient delivery, and great prices, make up 58% of paid units sold in our store, and in the EU are growing twice as fast as Amazon’s own sales. Nearly 200,000 entrepreneurs worldwide surpassed $100,000 of sales in our stores in 2018, and we estimate these sellers have created over 900,000 new jobs. We spend billions of dollars each year to help sellers succeed in our store, driving traffic, operating the servers and infrastructure that keep our online store open at all times, and combatting fraud and abuse. Our biggest single capital expenditure is our fulfilment and distribution network, which directly benefits sellers, who now have as many units in that network as Amazon itself. Our investments allow sellers to focus on their products while reaching customers throughout the world, levelling the playing field and lowering entry barriers.
Amazon

9 Responses

  1. And slowly it begins… legislation for marketplaces as the unfair treatment of sellers begins to gather momentum.

    Been calling for this for years. It should be national news but you don’t know even 1% of what it can be like until you try and run a business on either eBay or Amazon. Amazon are worse imho, vastly more unreasonable than eBay, but both have lots of areas that could be improved. Some of the policies are just draconian!

    They both should be heavily regulated, no different to how energy companies used to take the p*** out of consumers years ago.

    If Amazon was a county it’d be North Korea.

  2. careful what you wish for
    online markrt places are in the sights of brussels
    that means not just the companies
    tax and regulation will only increase

  3. As sellers, surely we all atleast agree that terming it as a “privilege” to sell on eBay and Amazon is just manipulation by power of position?

    It’s only a “privilege” because they know how much sellers DO rely on them and have very little options in terms of other marketplaces or quick scale through their own websites.

    We’d love to promote our website to the hundreds of thousands of customers that we serve on eBay and Amazon every year, but as we know, it’s against the terms and conditions of these websites to do so. The risk is therefore too high when the penalty for doing so is permanent suspension.

    Marketplaces coin these customers as “their” customers and not “ours”, but is that “really” right?

    A store in a shopping centre will pay excessive rates to be there because they know that’s where the footfall is. I see it as being no different to selling on eBay and Amazon, we too pay “excessive” rates to sell on marketplaces which are nothing but digital shopping centres. But is right or even fair that marketplaces impose rules preventing you from marketing to your own customers?

  4. There are probably many ways in which the law in the UK (at least) has intervened in pursuit of ‘fairness’ where one party has had all (or almost all) of the power in a relationship. Obvious example are in employment law or in abuse of commercial monopolies. So, it is not unusual for governments (including the EU) to take action. So, it is insufficent to say that it’s a private contractual agreement and the government can do nothing. In fact, I believe, that is the only way you can get Amazon and others to be more ‘fair’.

    I must say however, that over the last 12 years, I have grown a business on Amazon from virtually nothing to nearly a €1 million last year. Without the existance of Amazon (and particularly FBA) I could not have done it. Amazon can be a complete pain in the backside sometimes but certainly, if I look at my overall picture, I have to accept that.

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