The European Union to Investigate Amazon’s Data Practices

European Union competition commissioner Margrethe Vestager has just opened an inquiry into whether Amazon unfairly uses data gleaned from third-party sellers. The investigation has no deadline and could go on for years. At issue is whether Amazon has an unfair advantage by selling its own goods on the site, in competition with its third-party sellers. Amazon stated it will “cooperate fully” with the investigation as well as “continue working hard to support businesses of all sizes and help them grow.”

The New York Times notes that “the investigation highlights the growing importance of data in measuring the power of tech platforms … [as] regulators in Washington and Europe are looking more closely at whether the methods that companies like Amazon, Facebook and Google use to collect and hoard data give them an unfair advantage over rivals without comparable access to the same kind of data.”

“If powerful platforms such as Amazon are found to use data they amass to get an edge over their competitors, both consumers and the market bear the cost,” said European Consumer Organization spokesman Johannes Kleis.

Europe has taken the lead in regulation, fining Google three times in the last two years, with penalties totaling $9+ billion. Apple was levied $14.6 billion in 2016 for “unfair tax benefits it has received in Ireland.” According to sources, “European investigators are also in the early stages of an antitrust investigation involving Facebook.”

Spotify and other companies are also up in arms over Apple’s terms for sellers in its App Store.

In 2017, Amazon was also forced to repay 250 million euros “over illegal tax advantages it received from Luxembourg, where the company has its European headquarters,” and Germany has just reached a settlement with it over “how it terminates or blocks outside sellers from its site,” resulting in payment of costs related to returns and reimbursement and accepting more legal liability in its contracts with sellers.

Despite these efforts, European regulators have been criticized for taking too long to investigate these companies, with results that do not end in “meaningful changes to the companies’ practices.” The probe into Google’s antitrust practices, for example, took almost seven years to complete.