Amazon Hit by EU Complaint, Faces New Probe Over Sales

Amazon.com Inc. became the European Union’s latest Big Tech target as regulators escalated a case into how it uses rivals’ sales data on its platform and added a new probe into whether it unfairly favors its own products.

The European Commission said it suspects Amazon violated antitrust rules over its use of non-public business data from independent sellers on its marketplace that could benefit the company’s own retail arm. The EU regulator will also probe how Amazon chooses products for a prominent “buy box” and whether Amazon pushes retailers to use its own logistics and delivery services.

“We do not take issue with the success of Amazon or its size,” Margrethe Vestager, the EU’s antitrust commissioner, told reporters at a press conference in Brussels on Tuesday. She said the EU’s concerns focus on “very specific business conduct” linked to the company’s dual role as a retailer and a platform for smaller merchants.

An EU statement of objections for Amazon raises the risk of potential fines or a possible order for it to change business practices. Vestager has been ramping up scrutiny of many other big tech firms, adding probes into Apple Inc. and Facebook Inc. as well as some $9 billion in fines for Google. Regulators are also weighing new rules for online giants that critics say run a rigged game when they set the rules for platforms that also host their competitors.

The company said it disagrees with the EU’s assertions and “will continue to make every effort to ensure it has an accurate understanding of the facts.”

“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate,” it said in an emailed statement. “There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually and have created hundreds of thousands of jobs.”

While Amazon’s global sales last year were $280.5 billion, any fine is likely to be far less than the 10% of annual revenues the EU could levy -- and would be based on sales in European markets. Amazon made $22.2 billion in Germany and $17.5 billion in the U.K. in 2019, the only European sales it breaks out.

Amazon has around 3 million active merchants selling products on its site, with around a third of those in Europe, according to a 2019 report by e-commerce analysis firm Marketplace Pulse.

Amazon “is increasingly requesting information from retailers about suppliers, giving Amazon direct access to source the products itself,” said Oliver Prothmann, head of BVOH, the German association of online trade.

The EU warned last year it was probing suspicions that Amazon could spot best-selling products and start stocking the same thing itself -- essentially cherry-picking the most profitable or high-volume goods.

Regulators say the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and allows it to abuse a dominant position as an online host for merchants in France and Germany. Amazon’s retail arm can access “very large quantities of non-public seller data” which flow into automated systems that can calibrate Amazon’s own retail offers. That can help Amazon make “strategic business decisions” that might harm other sellers.

Vestager said there are other marketplaces in Germany and France, and that she just recently bought something on a French one, but Amazon “is indeed dominant in these two markets.”

The new investigation focuses on the “buy box” where Amazon highlights sellers of a particular product. Some 80% of sales go to the winner of the buy box, Vestager said. The EU will check how Amazon selects the winners of that box and how sellers can offer products to the Prime loyalty program. Officials will also check if that effectively favors Amazon’s own products and sellers that use Amazon’s logistics and delivery service.

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