The European Commission today announced a formal antitrust investigation over Amazon’s alleged abuse of sellers’ data.
The move will examine Amazon’s business practices as dual dominant. The investigation will access whether Amazon’s marketplace and retailer role are in breach of EU competition rules.
Amazon have come under fire again for their alleged abuse of merchants’ data in a bid to outmanoeuvre the competition.
The competition watchdog says their preliminary analysis of Amazon points to the marketplace’s abuse of competition on the platform. It indicates that Amazon are using merchants’ information competitively. It says Amazon looks at sellers’ products and transactions to compete with them.
The investigation will have a dual focus. First, it will examine the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third-party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.
Second, the role of data in the selection of the winners of the “Buy Box” and the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific seller directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.
“We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
– Amazon
These alleged findings underscore Amazon as a sticky wicket for sellers to grow their businesses. Amazon as a host of the intermediary platform, have the advantage to set out the rules to play.
When merchants enter the trading ‘game,’ they have no choice but to play by the rules. The dilemma sellers often face is to either obey the rules and stay put or rebel against the system and face disqualification. However, the game is full of unfair leaders. If that’s the case of someone else stepping in to level the playing field, let it be so, in the name of fairness.
2 Responses
I’ve just responded to an Amazon Seller satisfaction questionnaire. I listed one of my 3 biggest ‘bugbears’ as Amazon competition. It comes because Amazon has the due role of marketplace provider and retailer on the same marketplace. There is bound to be a conflict from this. From what I read Amazon could be thinking of withdrawing from retail in the future. Good!