EU Files Antitrust Suit Against Amazon

Trade wars tend to precede more violent conflicts. Currently, the US and Europe have been locked in a series of trade battles, the largest being the Boeing-Airbus dispute that was ruled in favor of Airbus and with that opening the way for billions in tariffs on imported goods. According to a report from CNBC, Amazon is now being pursued by the EU for violation of antitrust regulations.

The European Commission said Tuesday that Amazon breached European antitrust rules by using independent sellers’ data for its own benefit.

It has also announced a second formal investigation into the company’s e-commerce processes.

In a statement, the Commission said Amazon was using the data of third-party sellers – such as order numbers, revenues and number of visitors – to inform its strategic business decisions, like reducing the price of products.

The issue arises because of Amazon’s dual role which sees it both selling products itself, and acting as a platform for independent – sometimes rival – sellers.

“Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers,” Margrethe Vestager, the EU’s competition chief, said in the statement.

The decision comes after the Commission, which is the executive arm of the European Union, launched a probe into the online retailer in July 2019 on the back of concerns over anti-competitive behavior.

Amazon said it disagreed with the Commission’s assertions and “will continue to make every effort to ensure it has an accurate understanding of the facts.” It said that it represents less than 1% of the global retail market.

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” the e-commerce giant said.

The Commission’s second antitrust investigation will look at how the company choses which sellers offer products via Amazon Prime, its paid-for premium service. It will investigate the possible preferential treatment of Amazon’s own retail business and those that use its logistics and delivery services (known as “fulfilment by Amazon” sellers) over other sellers.

It will also look into the Amazon’s “buy box” function, which offers customers a one-click button to add a product to their shopping cart. U.S. regulators and third-party sellers have previously questioned Amazon over which products get placed in the all-important buy box. Amazon maintains that the buy box features the offer it thinks customers will prefer overall, while factoring in things like price, delivery speed and Prime. (source)

Now in fairness, there are two points.

First, Amazon truly has severely abused their position as a corporation and their workers for a long time, and US authorities have really done nothing to stop them. This is itself a major scandal.

Second, given the tendencies in Germany, if a German or other “European” equivalent of Amazon were to develop into another Amazon, one can only wonder if the Americans were being affected, if the US would attempt to file a similar suit against her.

This conflict about Amazon, while certainly not without much genuine merit, is more of a power struggle than one of just a fight against corporate greed. It is part of the growing economic divide between the US and Europe, and that will likely continue until it becomes much worse.

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