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European Commission sends statement of objections to Amazon regarding antitrust rules

The European Commission has told Amazon that in its preliminary view, Amazon has breached EU antitrust rules by distorting competition in online retail markets. Amazon has two roles on its platform. First, it offers a marketplace where independent businesses can sell their products directly to consumers. Second, Amazon sells its own products on the same marketplace, in competition with the independent sellers.

As the service provider Amazon has access to non-public business data of those third-party sellers. The data includes:

  • The number of ordered and shipped units of products;
  • Sellers revenues on the marketplace;
  • Number of visits to sellers offers;
  • Shipping data;
  • Past performance of sellers; and
  • Consumer claims on products.

The Commissions preliminary findings show that much of this data is available to employees of Amazon’s retail business and goes directly into the automated systems of that business. The data is used to make strategic business decisions to the detriment of the independent sellers and assert its dominance.

Article 102 of the Treaty on the Functioning of the European Union prohibits abusing conduct by companies that have a dominant position. It states,

“Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts”.

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