EU SHOW THEIR TEETH! Amazon case - 16 November 2020

BRUSSELS (Reuters) - The European Union charged Amazon with damaging retail competition, alleging on Tuesday that the U.S. company uses its size, power and data to gain an unfair advantage over smaller merchants that sell on its online platform

The move by competition chief Margrethe Vestager, the latest European salvo against U.S. tech giants, comes at a time when the COVID-19 pandemic has amplified Amazon’s role in the global economy, with online sales soaring in lockdowns.

The European Commission has been investigating Amazon’s position as both a marketplace for merchants and a rival seller, while the firm also faces scrutiny in the United States over its alleged mistreatment of sellers, as well as its dual role.

The EU regulator looked into how Amazon collects data on competitors that sell on its platform, offering everything from electronics and toys to food and kitchenware. It says that Amazon uses that sensitive information, which shows what is proving popular or not, to better target its own products.

“The use of these data allows Amazon to focus on the sale of the best-selling products and it marginalises third-party sellers and caps their ability to grow,” European Competition Commissioner Vestager told a news conference.

Vestager, who has a reputation of being one of the world’s toughest antitrust enforcers, said that regulators had to ensure that dual-role platforms with market power, such as Amazon, did not distort competition.

Amazon disagreed with the EU assertions.

“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate,” the company said.

A U.S. Congressional antitrust report earlier this year into the alleged abuse of market power by Amazon also raised the concerns highlighted by the EU and is likely to influence the case U.S. regulators bring against the company.

U.S. Representative David Cicilline, a Democrat and the top antitrust lawmaker in the House, applauded the EU and urged the U.S. Federal Trade Commision to take similar action.

“As we found as part of a 16-month bipartisan investigation, Amazon has monopoly power over sellers on its platform,” Cicilline said.

The EU charges are the latest example of how watchdogs around the world, led by Europe, are grappling with the challenges of regulating Big Tech, companies that have achieved dominance in their fields and vast troves of user data.