The European Commission has lodged a formal complaint against the Amazon Technology Group for suspicion of distortion of competition. Brussels is concerned about the way Amazon deals with external vendors who sell their products through tech company sites. The US group is accused of collecting data from those entrepreneurs, which are then used to compete with the same sellers.
The European Commission opened a formal investigation in the summer of last year. If Amazon is indeed found guilty of violating European competition rules, the commission can impose a fine of up to 10% of annual turnover on the company. That amount could be in Amazon’s billions.
The European regulator also announced that a second study of Amazon’s e-commerce practices is also under way. In doing so, the company is suspected of giving preferential treatment to its own retail offers and traders using Amazon Logistics and delivery services.
Commissioner Margrethe Vestager (competition) said in an explanatory statement that it must be ensured that platforms with market power such as Amazon do not distort competition. The company may not use external vendors ‘ data for its own benefit if it is competing with those parties and the conditions of competition on Amazon platform must be fair, says Vestager. “With the very strongly growing e-commerce and Amazon as a leading platform, it is important for all vendors that there is fair and undisturbed access to consumers online.”
Amazon has denied the abuse of its dominant position in online shopping. In response, the company stated that it did not agree with the commission’s allegations and that it would do everything in its power to inform Brussels of the facts.
Moreover, according to Bloomberg, the fine that the European Commission can impose could only be based on Amazon’s turnover on European markets. Amazon had a turnover in Germany last year of USD 22.2 billion and USD 17.5 billion in the United Kingdom. These are the only figures from European markets that the company reports separately.
Last year Amazon had a total turnover of over USD 280 billion. The Company Is this year on track for even higher turnover, because of the coronavirus much more online shopping is done. In the first nine months of this year, Amazon’s sales amounted to more than 260 billion dollars and the busy holiday season is yet to come.
Other major American tech companies are also in Vestager’s sights because of suspicions of abuse of power such as Facebook and Apple. Internet Group Google has received fines totalling USD 9 billion from the European Commission for violating competition rules.