According to the Wall Street Journal, the European Commission is bringing antitrust charges against Amazon for using data from third-party vendors to compete against them. According to some people familiar with the issue, these charges could be filed between next week and the following week and would be the result of an investigation that has been ongoing since late 2018.
The investigation, as Commissioner Vestager explained at the time, aims to discover whether Amazon is using the data of these vendors to, for example, detect which products sell well on the platform, manufacture them and sell them under its Amazon Basics brand. This, which is almost taken for granted, is against the treaties of the European Union, so Amazon could face charges for monopolistic practices.
This investigation is not new, as in 2016 this issue started to be discussed and in 2018 Vestage confirmed that it was taking a very close look at Amazon’s business practices and its dual role as a marketplace and retailer, to assess compliance with EU competition rules. To this end, forms were sent from Brussels to more than 1,500 companies to confirm whether Amazon had offered for sale products “identical or very similar” to theirs and what impact this had had. This not only limits the profitability of those who want to become sellers on Amazon, but it would be taking advantage of them by obtaining information about their suppliers and sales to, immediately afterwards, compete against them with the advantage of being the owner of the marketplace and not having to pay commissions on sales.
If Amazon’s practices are confirmed, Bezos’ company could face a fine of up to 10% of its annual turnover, which in 2019 was close to $300 billion. Thus, the potential fine could be just under $30 billion, about 26 billion euros. Amazon could appeal the fine in the European Union Court, as Google has done and as Microsoft did in 2004.
Vestager has never been afraid to sue and fine big tech companies. This is evidenced by the sanctions she has imposed on Google for abuse of its dominant position and the eight cases the commissioner is keeping open. These include Broadcom, Apple and Spotify, Google, Huawei and Facebook.