On 10 November 2020, the European Commission announced that it has sent a Statement of Objections to Amazon alleging that Amazon’s use of sensitive data from independent retailers who sell on Amazon Marketplace breaches Article 102 of the Treaty for the Functioning of the European Union (“TFEU”) (“Seller Data SO”). The Commission is alleging that Amazon has abused its dominant position as a marketplace service provider in Germany and France. Amazon denies the allegations set out in the Seller Data SO and will be contesting the Commission’s case.
With this latest move the Commission has confirmed that one of its key competition law enforcement priorities is the effective regulation of digital platforms. The issue of proceedings against Amazon sits alongside the Commission’s programme of introducing a number of legislative ex ante tools to control and regulate the operation of digital platforms. The Commission has already introduced an Online Platforms Regulation, Commission Regulation 2019/1150 on the fairness and transparency for business users which came into force on 12th July 2020. It is also proposing a Digital Services Act which is designed to modernize the legal framework for digital platforms setting out rules for digital services for the future while addressing foreclosure of competition by dominant digital platforms and other abuses of market power.
Following an investigation which started last year the Commission has provisionally found that very large quantities of non-public data received third party sellers using Amazon Marketplace are made available to executives of Amazon’s competing retail business. This feed of data is sent through via its automated systems.
This competitively sensitive data is then aggregated and used to improve Amazon’s own retail offers and strategic business decisions. In its Statement of Objections the Commission alleges that Amazon’s use of this competitively sensitive non-public marketplace seller data allows Amazon to “avoid the normal risks of retail competition and to leverage its dominance” in the market for the provision of marketplace services in France and Germany. These markets are Amazon’s biggest markets in the EU.
In addition to the Seller Data SO the Commission has also opened a second formal competition law investigation into whether Amazon’s business practices could give priority to its own retail offers and those offers of marketplace sellers that use Amazon’s logistics and delivery services, in breach of Article 102 of the TFEU. The investigation covers the whole of the EEA, other than Italy where the Italian competition authority is already investigating similar issues.
The scope of the Commission’s investigation will extend to examining whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon’s Prime loyalty programme may lead to preferential treatment of Amazon’s retail business or of the sellers using Amazon’s logistics and delivery services.
The Commission is concerned that Amazon may be artificially giving priority to retailers that use its own related services, thereby foreclosing competing service providers and increasingly locking in these retailers into Amazon’s product offerings.
Alongside the Google Shopping case which is currently on appeal to the General Court this case is likely to be a landmark case in the enforcement of competition law to digital platforms.
