EU investigates Amazon’s use of sensitive data from independent sellers

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The European Commission is investigating whether Amazon’s use of sensitive data from independent sellers provides a competitive advantage. In the meantime, after pressure from the EC and especially the German watchdog, Amazon has adjusted the previously strict conditions for independent sellers.

According to Margrethe Vestager, European Commissioner for Competition, the investigation focuses on Amazon’s business activities and specifically the company’s dual role; Amazon is both a seller and a marketplace for independent third-party sellers. The Commission argues that Amazon continuously collects data on the activity of these independent sellers. On the basis of an initial fact-finding, the Commission argues that it appears that Amazon uses competitively sensitive information, such as information about the marketplace sellers, their products and the transactions.

Specifically, as the EU competition watchdog, the Commission will look at two aspects. The first concerns the standard agreements concluded between Amazon and the marketplace sellers. These allow Amazon to analyze and use sales data from third parties. The Commission mainly wants to see whether this acquired data has an impact on competition.

Secondly, the role that the collected data plays in the selection of the winners of the so-called buy box is examined. This is a box on the right side of a product page on Amazon that highlights a specific seller and allows buyers to add their product directly to the digital shopping cart. Providers in this box have a great advantage, because it makes them stand out prominently and because it allows a quick purchase of the product. The majority of transactions take place via this buy box.

Depending on the results of the investigation, Amazon’s practices could be seen as a violation of provisions prohibiting anti-competitive agreements and the abuse of a dominant position. This is an in-depth study that is being carried out as a matter of priority, but nothing can be said about the results and when they will be available.

On Wednesday, it was also announced that Amazon has decided to make changes to its terms and conditions for independent sellers. Those changes will be implemented on all European Amazon websites, as well as those in North America and Asia. These amendments will take effect in 30 days and relate to complaints the German competition watchdog had received from a variety of independent sellers. On this basis, the Bundeskartellamt opened its own investigation into Amazon in November last year, but that investigation is now being terminated due to the amended conditions. During this investigation, the Bundeskartellamt kept in close contact with the European Commission. Vestager now focuses specifically on Amazon’s use of data.

The amended terms and conditions cover quite a few topics. For example, Amazon may no longer completely exclude its liability towards sellers and the company may no longer just cancel or block accounts without justification. In the event of conflicts, it will also be possible under certain circumstances to choose a national court, so that one no longer has to go exclusively to a Luxembourg court.

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