Amazon

Prime Day Shocker: Amazon Facing “Full Blown” Antitrust Probe by Europe’s Most Powerful Regulator

The E.U.'s investigation into how Amazon competes with its third-party sellers could begin “within days.”
Margrethe Vestager in front of a projection saying “Antitrust”
European Commissioner for Competition Margrethe VestagerBy Thierry Monasse/Getty Images.

Amazon's much-hyped Prime Day has now been clouded by more than just striking workers, as new reports indicate the European Union is setting its sights on the retail giant. Bloomberg reported Tuesday that E.U. competition commissioner Margrethe Vestager—who has sued so many tech companies that President Donald Trump accused her of “hating the United States”—is now putting Amazon in the crosshairs for their practices related to third-party sellers. A formal, “full-blown” antitrust investigation into the company is likely to start “within days,” sources reported.

The impending E.U. investigation is likely to focus on how Amazon uses data from third-party sellers, as the company has been criticized for allegedly using data from third-party sellers who use the retail platform to create their own similar, competing merchandise through the company's AmazonBasics brand. “If powerful platforms are found to use data they amass to get an edge over their competitors, both consumers and the market bear the cost,” Johannes Kleis, communications director at European consumer organization BEUC, told Bloomberg. Per Bloomberg, Vestager has reportedly been “hinting” for months that she wants to ramp up an existing preliminary inquiry into Amazon's practices, which could lead to fines for the tech behemoth or potentially an order to change its business practices. The potential investigation would mark the E.U.'s third investigation into Amazon, following previous inquiries concerning its taxes and e-books, and come after Vestager previously levied hefty fines on fellow tech giants Google and Apple.

The E.U. report caps off an already troubling day for Amazon, as lawmakers back at home similarly targeted the company for its potential antitrust violations. Amazon took part in one of three tech-focused hearings on Capitol Hill Tuesday, as company representatives appeared alongside representatives for Google, Apple, and Facebook for an antitrust hearing with the House Judiciary Committee. (The company is also separately being targeted by the Federal Trade Commission, which has reportedly already been asking competitors about the company's practices.) Lawmakers during the House hearing appeared unswayed by Amazon's company line about their seller data, as antitrust subcommittee chairman Rep. David Cicilline pushed back on Amazon associate counsel Nate Sutton's insistence that the company “[doesn't] use individual seller data to directly compete with them.” “You collect all this data about the most-popular products, where they’re selling, and you’re saying you don’t use that in any way to change an algorithm to support the sale of Amazon branded products?” Cicilline asked. Sutton emphasized that the company only uses its data to “serve our customers” and “appl[ies] the same criteria” to its algorithm for both Amazon and third-party sellers, likening its private-label brands to regular retail stores selling store brands alongside name-brand products. Cicilline, however, was not convinced, repeatedly reminding the Amazon lawyer that he was “under oath.” “Amazon is a trillion-dollar company that runs an online platform with realtime data with millions of purchases . . . and can manipulate algorithms on its platforms and favor its own product,” Cicilline said. “That is not the same as a local retailer . . . it's quite different.”

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