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European Commission accuses Amazon of using third-party seller data to bolster its own products


In short: Massive tech firms at all times appear to be on the heart of at the very least just a few antitrust lawsuits and investigations, and Amazon is actually no exception to that rule. Immediately, the digital retail behemoth has been embroiled in one other such go well with: the European Commission believes the corporate is unfairly using third-party seller data to bolster its own products.

Amazon is in a bit of a wierd place so far as digital retailers go. Not solely does the corporate promote a wide selection of its own, customized products; starting from mice to keyboards and from audio system to chairs, however it additionally hosts hundreds upon hundreds of different product listings as properly.

As such, the Commission believes Amazon has exploited its dominant market place to achieve an unfair benefit over the third-party sellers whose products it hosts. Commission investigators discovered that Amazon feeds back-end data about third-party sellers’ products into its own algorithms to assist it resolve which products to launch.

The Commission says Amazon is using this data to immediately copy the products of some third-party sellers after which promote its own variations at a lower cost level. That is one thing Amazon has been accused of up to now, and it is how a number of products within the firm’s “Amazon Basics” catalog got here to be.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” explains European Commission government vp Margrethe Vestager in a press release. “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.”

This investigation started a whopping two years in the past, and has lastly resulted within the above findings. Nonetheless, these are solely preliminary — a second investigation is beginning quickly, and it’ll deal with a associated half of Amazon’s enterprise mannequin: the “buy box.” The purchase field is just the portion of a given Amazon itemizing that options the massive “Add to Cart” and “Add to List” buttons.

When a number of sellers are itemizing the identical product, just one of them can occupy the purchase field at a given time (with the remainder being pushed to a smaller “Other Sellers” part beneath). The European Commission’s concern lies within the risk that Amazon is favoring itself right here, or third-party sellers who select to use the retailer’s transport methods in lieu of impartial options like FedEx or UPS.

If Amazon is discovered responsible after this second investigation concludes, it may very well be compelled to pay up to 10 p.c of its annual income in fines, which might be a considerable chunk of change. After all, Amazon’s deep pockets additionally imply it could afford to retain world-class attorneys, so it stays to be seen whether or not or not any prices will stick in the long run.