The European Commission has formally charged the US-based tech and online behemoth, Amazon, with abusing its dominant position in online retail and breaking online competition laws in order to gain an unfair advantage over competitors.
The Commission has said that Amazon had used data on third-party sellers that use its marketplace to boost sales of its own label goods. Following this, the Commission has also launched a new probe into the possible preferential treatment of sellers that use Amazon’s logistics services.
Amazon has so far rejected the charges, saying that no firm ‘cared more’ for small businesses.
The online giant now faces a fine as high as 10 per cent of its global turnover if it is found guilty of breaking the competition law. This will total around £15bn.
A statement put forward by the EU’s Competition Commissioner, Margrethe Vestager, said that it was vital that platforms with ‘market power’ did not ‘distort competition.’
“Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers,” she added.
“With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
The European Commission has been investigating Amazon since July last year, following complaints from traders. It says the tech giant accesses sensitive data from small and medium-sized companies that use its platform, such as sales figures, page visits or shipping information.
It then uses this to help with sales of its own-label products, or in choosing suppliers, the Commission says.
Amazon has insisted, however, that – far from being anti-competitive – its private-label products were good for customers and offered more choice.
“Amazon represents less than one per cent of the global retail market, and there are larger retailers in every country in which we operate,” it said.
“No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
Cas Paton, founder and CEO of the UK-based online marketplace, OnBuy, is among those to have expressed ‘delight’ at the action taken by the European Commission.
“On behalf of every business which trades through eCommerce platforms, I am delighted to see that the European Commission has today taken the first step to address Amazon’s monopoly on the eCommerce market,” he said.
“Ecommerce platforms should be designed to support small business, not to trample upon them to line their own pockets. Any eCommerce platform that positions itself in direct competition with its sellers has a flawed business model.
“Traders and sellers have been campaigning for over a year for Amazon’s monopoly to be addressed. We need to see change before Amazon’s policies bring about the demise of many SMEs which sell through the platform.”