Amazon’s use of merchants’ data triggered an EU antitrust investigation on Wednesday, as regulatory concerns mount on how tech giants exploit customer information to reinforce their market power, Reuters reports.
The European Commission has been seeking feedback from retailers and manufacturers since September into Amazon’s dual role as a marketplace for merchants and as a competitor, following complaints from traders about Amazon’s practices.
The Commission said its investigation will look into Amazon’s data agreements with marketplace sellers and how the online retailer uses that data to choose which seller is selected to provide a product once a consumer clicks “buy.”
European Competition Commissioner Margrethe Vestager, who can fine companies up to 10 percent of their global turnover and force them to change their business practices, said the issue is crucial as increasing numbers of Europeans shop online.
“E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behavior,” she said.
Amazon said it will cooperate fully with the EU investigation. The company reached a deal with Germany’s antitrust authority on Wednesday to overhaul its terms of service for third-party merchants.
Under Amazon’s terms of service for Europe here set out on its website, merchants grant Amazon “royalty-free” rights to use their materials, such as technology, trademarks, content and product information.
The Commission may take a tougher approach this time to set a precedent for other platforms providing a marketplace whilst competing with their own products, Reuters quoted Ioannis Lianos, professor of global competition law and public policy at University College London, as saying.
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