Brussels: Amazon.com Inc. is finding that it doesn’t have a safe space.
The European Union said Tuesday that Amazon is likely breaching antitrust rules by misusing the data of independent sellers, and also said the retailer may be favoring its own products and those of marketplace traders who use its logistics. The allegations come as President Donald Trump has targeted the company, and a change in American administrations may not ease the attacks.
The world’s biggest online retailer is becoming a global punching bag for regulators even as its sales soar during a pandemic that’s shut many brick-and-mortar stores. The EU’s announcement is just the latest in a slew of probes and regulatory initiatives from Brussels to Berlin to Washington examining the e-commerce giant’s business practices.
In the U.S., Amazon has faced increasing scrutiny in recent years from Trump, including Twitter attacks against the company and its founder, Jeff Bezos. Attorneys general from New York and California are also partnering with the Federal Trade Commission to investigate Amazon’s online marketplace, people familiar with the matter said in August.
The election of Joe Biden likely means continued antitrust scrutiny as he is expected to bring more robust enforcement than was seen under former president Barack Obama. An October report by the Democrat-led House Antitrust Subcommittee found Amazon abused its power over third-party sellers on the Amazon marketplace in part by exploiting its access to sellers’ data. The report recommended that tech giants shouldn’t be able to compete against companies that operate on their platforms.
The report “is meant to inform legislation, so that effort will continue to move forward,” said Jennifer Rie, an attorney and antitrust analyst for Bloomberg Intelligence.
If the panel’s proposals are passed into law, Amazon’s ability to operate the largest online marketplace and sell its own goods in the same digital storefront may be hamstrung.
While Republicans probably won’t agree to that, some Republicans could support less dramatic proposals to protect startups.
“It is fundamentally anticompetitive to simultaneously serve as the only substantial marketplace operator, including setting terms, policies, and fees; host third-party sellers; and use marketplace data to launch and sell competitive products,” U.S. Representative Ken Buck of Colorado said in his report, which three fellow Republicans joined.
The ultimate make up of the Senate could impact what’s contained in legislation, said Rie. “I have doubts that there will ultimately be a prohibition on operating a platform and competing on it, but there could be some rules placed around it.”
In Canada, the competition regulator is checking whether the company influences consumers to pick its products over those offered by rival sellers.
Pandemic success
Amazon has emerged as rare winner in the pandemic, with more people staying home and ordering goods online. The company’s sales are expected to reach a milestone this holiday season, with revenue set to surpass $100 billion in the fourth quarter of 2020.
Amazon’s sales of toilet paper during a stockpiling frenzy earlier this year are being probed by Germany. Amazon had threatened to expel merchants that don’t comply with its pricing policy after toilet paper suddenly soared in price. Italy quizzed Amazon and others in March about price spikes for face masks and hand sanitizers.
Also in Germany, Amazon is currently a target of antitrust scrutiny over a policy that excludes independent sellers of brand products on the online marketplace. So-called “brandgating” allows makers of branded products such as iPhones to have independent sellers removed from the platform. Italy is also probing Amazon over restrictions on sales of Apple products, while India is investigating the company over exclusive arrangements with mobile phone brands and potentially preferential treatment given to some sellers.
Tuesday’s announcement is also only the beginning of more headaches facing Amazon in Brussels.
The company may be hit by new European Union rules due to be unveiled as soon as the end of the year. Under the new regulation, powerful platforms could be prohibited from using data collected on their sites for their own commercial services unless they share it with business users active in the same area.
–With assistance from Ben Brody and David McLaughlin. -Bloomberg
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