Margrethe VESTAGER, on Antitrust Commission sends Statement of Objections to Amazon for the use of

Executive Vice-President Vestager on Statement of Objections to Amazon for the use of non-public independent seller data and second investigation into its e-commerce business practices. https://www.eudebates.tv/ #eudebates #Amazon #antitrust #BuyBox #ecommerce #Data

Today, the Commission has sent a Statement of Objections to Amazon with the preliminary conclusion that Amazon illegally distorted competition in online retail markets. The Commission has also decided today to open a second investigation into Amazon's e-commerce business practices.

I will first focus on the Statement of Objection before taking you through the new investigation we have just opened.

Amazon “Data” case - Statement of Objections
In July last year, the Commission opened an in-depth investigation to assess Amazon's use of sensitive data. The sensitive data comes from independent retailers selling on Amazon's marketplace.

The investigation started as a follow-up to our 2015 inquiry into e-commerce where we gathered a first insight on Amazon's business practices. And we have now come to the preliminary conclusion that Amazon illegally abused its dominant position as a marketplace service provider in Germany and France - the biggest markets for Amazon in the EU.

We all know how important e-commerce is today. And the current crisis has demonstrated even further that buying online is now commonplace for many of us. People shop online more frequently and for an increasing variety of products. The value of online sales in Europe has been growing steadily and almost doubled in the last 5 years, reaching almost €720 billion this year up from almost €375 billion in 2015.

Amazon is at the centre of this market development. More than 70% of consumers in France and more than 80% of consumers in Germany that made online purchases bought something from Amazon in the last 12 months.

We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct, which appears to distort genuine competition.

Amazon has a dual role as a platform. On the one hand, it operates marketplaces that allow third party sellers to offer products to consumers. We have found that Amazon is the most important or dominant marketplace in many European countries. On the other hand, Amazon is also a retailer on its own platform. So, Amazon directly competes with the third party sellers that rely on its platform to offer their products. Third party sellers are often SMEs selling their own products through the Amazon platform.

Amazon is a data-driven and highly automated company, where business decisions are based on algorithmic tools. We analysed a data sample covering over 80 million transactions and around 100 million product listings on Amazon's European marketplaces. Our investigation shows that very granular, real-time business data relating to third party sellers' listings and transactions on the Amazon platform, systematically feed into the algorithms of Amazon's retail business. It is based on these algorithms that Amazon decides which new products to launch, the price of each individual offer, the management of inventories, and the choice of the best supplier for a product.

When a seller decides to list on the Amazon platform a household product like a computer accessory, a kitchen appliance or a garden tool and when people start buying these products, Amazon gathers data about those sellers and each transaction.

Amazon has for example access to data on the number of ordered and shipped units of sellers' products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, information relating to shipping, the sellers' past performance, the consumer claims on sellers' products, including the activated guarantees. And Amazon gets these data for every seller, every listed product and every purchase on its platform.

Our concerns are not only about the insights Amazon Retail has into the sensitive business data of one particular seller. Rather, they are about the insights that Amazon Retail has about the accumulated business data of more than 800 000 active sellers in the EU, covering more than a billion different products. In other words, the case is about big data.

Our investigation shows that Amazon is able to aggregate and combine individual seller data in real time, and to draw precise, targeted conclusions from these data.

Many retailers invest heavily to identify products of interest and bring them to consumers, taking risks when they invest in new products or when choosing a specific price level. Amazon can avoid some of those risks by using the third party seller data for such business decisions.
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