Under Amazon’s terms of service for Europe, set out on its website, merchants grant Amazon “royalty-free” rights to use their materials, such as technology, trademarks, content and product information. Amazon’s use of merchants’ data has triggered an EU antitrust investigation, as regulatory concerns mount around the world on how tech giants exploit customer information to reinforce their market power.
The European Commission has been seeking feedback from retailers and manufacturers since September 2018, into Amazon’s dual role as a marketplace for merchants and as a competitor, following complaints from traders about Amazon’s practices. The Commission said that its investigation would look into Amazon’s data agreements with marketplace sellers and how the online retailer uses that data to choose which seller is selected to provide a product once a consumer clicks “buy.”
“E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour,” said European Competition Commissioner Margrethe Vestager, who can fine companies up to 10% of their global turnover and force them to change their business practices. She also mentioned that the issue was crucial as increasing numbers of Europeans shop online.
It is speculated that the Commission may take a tougher approach this time to set a precedent for other platforms providing a marketplace whilst competing with their own products, said Ioannis Lianos, professor of global competition law and public policy at University College London.
Amazon said it would cooperate fully with the EU investigation. The company reached a deal with Germany’s antitrust authority on Wednesday to overhaul its terms of service for third-party merchants.
This post has been authored by Tasneem Zakir, 3rd year, National University of Juridical Sciences, Kolkata
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