EU opens investigation into Amazon use of data about merchants

Amazon’s business model is under the spotlight in Europe after the EU’s antitrust watchdog launched a preliminary investigation into how the platform uses data about merchants.

The informal investigation concerns the ecommerce group’s dual role as a competitor but also host to third-party merchants, which sell goods on Amazon’s websites, said Margrethe Vestager, EU competition commissioner.

The commission sent questionnaires to merchants this week to gather information. The action was not prompted by a complaint but rather initiated based on the commission’s own market observations and the results of its ecommerce sector inquiry completed in 2017.

Amazon’s website sells its own products as well as those from other businesses. Its marketplace business lists the products of third-party sellers on its websites, alongside the company’s own items. The independent sellers can choose to use some or all of the platform’s fulfilment and payment services.

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More than half of all global businesses sell their products on Amazon’s marketplace and European businesses used the service to export over €5 billion worth of goods last year, according to company figures.

Selection and range

Amazon earns revenues for the services it provides but the company also benefits because the third-party sellers increase the selection and range of products available on Amazon's websites. The independent sellers can expand their reach and start selling online with limited initial investment.

European officials have stressed that this is not a formal probe, however, the action indicates that the commission does have concerns about the set-up.

Amazon declined to comment.

The questionnaires will be returned in the next month or two, after which time EU officials will determine their next steps, if any. – Copyright The Financial Times Limited 2018