Amazon to face European Union antitrust investigation

Amazon accused of abusing its position as both retailer and retail platform

Online retail giant Amazon is facing a full European Union investigation into possible anti-competitive conduct, the European Commission has announced today.

The investigation will centre on Amazon's dual role as both a major retailer in its own right, as well as a platform for third parties to sell their wares, too. The Commission has been conducting a preliminary investigation for some time.

"When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on the Commission's preliminary fact-finding, Amazon appears to use competitively sensitive information - about marketplace sellers, their products and transactions on the marketplace," the Commission claimed today.

In particular, the investigation will focus on the standard agreements Amazon imposes on its marketplace sellers that, the Commission claims, empowers the retail giant to analyse and exploit data generated by its sellers.

Indeed, for years, marketplace sellers have claimed that Amazon frequently pitches its own-label products against them, at a lower price, if they appear to have established particularly popular and profitable product lines.

"Based on the Commission's preliminary fact-finding, Amazon appears to use competitively sensitive information - about marketplace sellers, their products and transactions on the marketplace," European Commissioner for Competition Margrethe Vestager claimed today.

On top of that, sellers have also suggested that serious faults highlighted in reviews that would get their products almost instantly suspended are routinely ignored when an Amazon product is involved. And that's on top of the market for intellectual-property-busting knock-offs that Amazon has also been accused of enabling.

While the investigation - including appeals - is likely to last years, the company faces fines of up to 10 per cent of annual turnover if it is found guilty. Amazon has already agreed to third-party rule changes in its German operations, although it's not clear whether the same measures would satisfy the Commission if rolled out across the EU.

Nevertheless, Amazon pledged full cooperation with the investigation. "We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow," the company said in a statement today.

Back in 2014 at a Computing event, UK retailer Marks & Spencer's then CIO Darrell Stein revealed that the company had removed the ecommerce side of its business from Amazon Web Services (AWS) for its cloud programme partly over fears about how the data it generated could be used by Amazon.

And earlier this month it was revealed that the UK's Competition and Markets Authority (CMA) was looking into potential breaches of competition rules arising from Amazon's involvement in a recent funding round for Deliveroo.