- Don-Alvin Adegeest |
Amazon has been charged with damaging retail competition by the European Union. The company’s sheer size and dominant position in online retail has seen it abuse an unfair advantage over competitors.
The BBC said Amazon had used data on third-party sellers that use its marketplace to boost sales of its own-label goods.
According to European Competition Commissioner Margrethe Vestager, the American retail giant is using its size, power and data to give it an unfair advantage over smaller merchants that sell on its online platform.
The European Commission (EC) has been investigating Amazon’s dual role - as a marketplace for merchants and also a rival seller.
The main task of the EC’s Regulatory Body is to ensure a fair and non-discriminatory access to the rail network and services. The regulator looked into how the company collects data on competitors that sell on its platform, offering everything from fashion to food to homeware.
It said that Amazon uses that sensitive information, which shows what is proving popular or not, to better target its own products.
“The use of these data allows Amazon to focus on the sale of the best-selling products and it marginalises third-party sellers and caps their ability to grow,” Vestager told a news conference.
Amazon disagreed with the EU assertions.
“Amazon represents less than 1 percent of the global retail market, and there are larger retailers in every country in which we operate,” the company said.
The charges are the latest example of how watchdogs around the world, led by Europe, are grappling with the challenges of regulating Big Tech, companies that have achieved unprecedented dominance in their fields and command vast troves of user data.
According to Ireland’s RTE publication, the EU has imposed large fines on Alphabet’s Google and other companies. Amazon faces a fine of 10 percent of its global turnover if found guilty of breaching antitrust rules. Penalties can be avoided if a company seeks to offer a concession to settle.
Image via Pexels; article source RTE