Amazon, in the sights of the European Commission

The American giant Amazon is in the sights of the European Commission on suspicion of anti-competitive practice. Between containment and deconfinement it is our whole way of consuming that has been disrupted. Indeed, our shopping habits have changed. They were favoured by the closure of shops.

According to FEVAD and Mediametry, more than three quarters of Internet users (76%) made at least one online purchase during the last days of confinement (1). These new upward trends have highlighted problems in the operation of some platforms. Amazon is being questioned by the European Commission, which accuses it of anti-competitive practice. But what about really?


The European Commission, an institution to promote the general interest of the European Union

The European Commission has been in existence since 1958. Now chaired by Ursula von der Leyen, it aims to defend the general interest of the European Union. To do that, it will propose legislation. It will ensure their implementation while implementing EU policies and budgets. Thus, it is the executive and politically independent branch of the European Union. It will propose new legislation to deal in particular with issues that cannot be dealt with at the national level. It will also manage the policies of the European Union.

In addition, it will allocate funding and ensure compliance with European law. More generally it will represent the European Union around the world. Lately it has raised the problem of Amazon and anti-competitive practices.

Thus, as part of its mission, the European Commission has alerted Amazon to these anti-competitive practices. According to the latter, the company is in violation of European Union rules on anti-competitive practices. Amazon would distort competition in the online retail market. The group will use the commercial and non-public information of the independent sellers listed on the platform. This information is used by following for the benefit of its own business.

In addition, a second investigation has been opened. It concerns the possible preferential treatment of Amazon’s offers. But also those of the sellers of its market place who use Amazon’s logistics and delivery services at the expense of other independent sellers. Amazon has already been alerted in July 2019 about this.

amazon anti-competitive practice
For Amazon the time is for explanations with the European Commission to present the facts in a transparent manner.

Amazon and anti-competitive practice, between springboard and competition for independent sellers

Thus begins a long dialogue between the European Commission and Amazon on anti-competitive practices. On the one hand the tone is accusatory and on the other Amazon denies and wants to explain in just terms its terms. Indeed, Amazon argues support independent sellers. The Group offers them a market place with high visibility.

In addition, it says it is an important job generator in France. Amazon expects to reach more than 9,300 employees by the end of the year. However, for independent sellers who want to take part in the Amazon adventure, there seems to be a price to pay.

Amazon has a dual role. It provides independent sellers with a market place and at the same time sells products as a retailer in the same market place.

This leads to competition with these sellers. In addition, as a market place service provider, it has access to non-public commercial data from third-party sellers. As such, the Commission considers, as a preliminary matter, that the use of non-public data from sellers in its market place allows the group to avoid the normal risks of competition. It can thus take advantage of its dominant position to adjust its offers in France and Germany in particular.

If the preliminary study confirms these practices, they would be contrary to Article 102 of the European Union Operating Treaty (EUTC). This article aims to prohibit abuses of a dominant market position (2).

While the current pandemic is boosting e-commerce, it emphasizes its ambivalence. With the changes and increases in online shopping, it may be appropriate to encourage all possible transparency…

Sources:

(1) [1ère vague] “Online shopping habits, between confinement and deconfinement,” FEVAD, study of July 7, 2020

(2) “Anti-competitive practices: Commission sends a statement of grievances to Amazon regarding the use of non-public data of independent sellers and opens a second investigation into its e-commerce practices”, European Commission, Press release of 10 November 2020

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