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Europe accuses Amazon of utilizing domination and knowledge to oust rivals

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© Reuters. FILE PHOTO: Amazon's logo is depicted in the company's Bengaluru office

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From Foo Yun Chee

BRUSSELS (Reuters) – The European Union accused Amazon (O 🙂 of harming retail competition, alleging on Tuesday the US company was using its size, power and data to gain an unfair advantage over smaller retailers, who sell on its online platform.

The move by competition boss Margrethe Vestager, the latest European volley against US tech giants, comes at a time when the COVID-19 pandemic has reinforced Amazon's role in the global economy and online sales are skyrocketing.

The European Commission has been scrutinizing Amazon's position as both a marketplace for merchants and a competing seller, while the US is also under scrutiny for its alleged mistreatment of sellers and its dual role.

The EU regulator looked at how Amazon collects data on competitors selling on its platform, offering everything from electronics and toys to food and kitchen ware. It is said that Amazon uses this sensitive information that shows what is proving popular or not to better target its own products.

"By using this data, Amazon can concentrate on selling the best-selling products and push third-party providers to the edge and limit their ability to grow," said EU competition commissioner Vestager at a press conference.

Vestager, who has a reputation for being one of the toughest antitrust authorities in the world, said regulators need to ensure that dual-role platforms with strong market power like Amazon don't distort competition.

Amazon disagreed with the EU's claims.

"Amazon accounts for less than 1% of the global retail market, and there are larger retailers in every country we operate in," the company said.

A US Congress antitrust report earlier this year on the alleged abuse of market power by Amazon has also raised concerns raised by the EU and is expected to influence the case brought by US regulators against the company.

US Representative David Cicilline, a Democrat and the House's leading antitrust lawmaker, applauded the EU and called on the US Federal Trade Commission to take similar action.

"As we found in a 16-month bipartisan investigation, Amazon has a monopoly over sellers on its platform," said Cicilline.

The EU fees are the latest example of how guard dogs around the world, led by Europe, grapple with the challenges of regulating big tech, companies that have become dominant in their field, and a plethora of user data.

Vestager believes the EU has fined Google (Alphabet 🙂 and other Alphabet (NASDAQ 🙂 companies heavily. See FACTBOX:

A final EU decision could come next year. Amazon faces a fine of up to 10% of its global sales if found guilty of violating antitrust regulations. However, it can avoid a heavy penalty and a determination of wrongdoing by offering concessions to settle.

NEW INVESTIGATION

The EU Competition Commissioner has been investigating Amazon since July last year after competing retailers voiced their complaints. The regulator said the fees were related to Amazon's activities in France and Germany, the two largest markets in Europe and where it is the dominant player.

The case focuses on the use of merchant data on its platform. According to Vestager, their officials had carried out 80 million transactions and checked 100 million products on the Amazon platform to put the case together.

The European Commission launched a new investigation into Amazon on Tuesday, looking into the possible preferential treatment of their own retail offerings and those of market sellers who use Amazon's logistics and delivery services.

This research will examine the possible preferential treatment of Amazon's own retail offerings and market sellers using Amazon's logistics and delivery services.

Regulators are investigating the criteria the company uses to select the winners of its "Buy Box" which allows customers to add items from a particular retailer directly to their shopping cart.

"Its rules should not artificially favor Amazon's own retail offerings or take advantage of the offers of retailers who use Amazon's logistics and delivery services," Vestager said, citing the importance of e-commerce, an area associated with the COVID 19 pandemic has grown in importance.

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