Amazon Offers Concessions to Call Off EU’s Antitrust Probes

In the wake of the European Union’s strict new digital-competition laws, Amazon has proposed settlements in two EU antitrust cases. The U.S.-based e-commerce giant says it will stop using non-public data it obtains from the activities of independent sellers on its marketplace to inform its own business decisions in competition with those sellers. A separate investigation found Amazon to be self-dealing with regard to its Buy Box and Prime plans, resulting in a commitment to give third-party sellers equal treatment. The commitments would remain in force for five years, monitored by a trustee reporting to the European Commission.

The European Commission announced last week it is seeking feedback on Amazon’s settlement proposals, with comments due September 8. The European Commission identifies as problematic Amazon’s “dual role” as a marketplace for independent sellers and also as a retailer that competes with those sellers on its own platform.

“As a result of this dual position, Amazon, has access to large sets of data about the independent sellers’ activities on its platform, including non-public business data,” the EC explained.

“Although a settlement wouldn’t require Amazon to make any changes to its business practices outside of Europe, lawyers said the commitments could end up having wider repercussions because companies sometimes choose to apply changes they are compelled to make in Europe to their global operations,” writes The Wall Street Journal, calling the practice “the Brussels Effect” (in reference to a book by the same name).

Reuters reports that Amazon’s offers “to halt online selling and marketing practices EU antitrust regulators regard as anti-competitive” are a move to “avoid a possible hefty fine, ahead of EU rules that will target such methods from next year.”

The conciliatory gesture follows competition-friendly overtures by Alphabet’s Google, both in the U.S. and the EU — an indication the antitrust mood sweeping global regulators is getting Big Tech’s attention.

“A breach of the commitments could result in a fine of up to 10 percent of the company’s global revenue,” writes WSJ, noting that Amazon “disagreed with several of the commission’s conclusions and has serious concerns about new EU legislation ‘unfairly targeting Amazon and a few other U.S. companies.’”

In a related move, Amazon has begun “drastically reducing the number of items it sells under its own brands,” according to The Wall Street Journal, which attributes the move to a combination of disappointing sales and global antitrust charges. Amazon was hawking 243,000 private-label products across 45 categories as of 2020, according to WSJ, which says “the company has discussed the possibility of exiting the private-label business entirely to alleviate regulatory pressure.”

Amazon Considered Ending Private-Label Sales to Appease Regulators, Bloomberg, 7/15/22
Amazon Executives Have Discussed Ditching Amazon Basics to Appease Regulators, Vox, 7/15/22

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