Amazon v EU: Has the online giant met its match?

Amazon and the EU

Covid-19 was not an omen of misfortune for Amazon, unlike many other companies.

Its share price has actually risen since March, reaching a record high last week.

It turns out that online retailing isn’t a bad place to be when all the stores are closed. Jeff Bezos’ cloak as the richest man on the planet looks safe for now.

But all over the world, governments look to Amazon and ask if the tech giant is – well – too big.

Do you wrongly use your dominant position?

The EU now appears set to blame Amazon for anti-competitive behavior. This could cost Amazon a lot of money and could alter the shopping experience it offers customers.

What is the EU doing?

At the heart of the EU’s concerns is Amazon’s dual role.

He runs an online store and also sells his products on that platform. The criticism is that it is both the player and the referee.

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Margrethe Vestager is the EU’s guarantor of competition

Speaking to the BBC last year, the executor of the European competition Margrethe Vestager said: “We never accept in a football game that a team was judging the game.”

What could Amazon be accused of?

Much of the EU’s concern is believed to focus on the data Amazon has access to and how it uses it. It can display sensitive commercial information on third-party products, such as volume and price.

The big question is: is the company using that data to give its Amazon products an unfair advantage?

For example, the Wall Street Journal reported that Amazon had access to third-party vendor data to develop its products.

In other words, Amazon understands what sells well on its platform and can simply replicate what sells best.

There are also other accusations.

If you buy a product on Amazon, you will get other similar products that will be suggested to you in a pop-up called “Buy Box”.

If you are interested in selling products, having your product in the Amazon Buy Box is – to put it simply – a good thing.

But does Amazon unfairly promote its products at third party expenses? The EU is sniffing in this area.

What does Amazon say?

The general defense is that there are many companies that act both as a shop and as a supplier. Tesco and Sainsbury’s both sell their labeled products in their stores, for example.

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In the UK, supermarkets such as Tesco sell their brands in their stores along with others

They also argue that – far from being anti-competitive – private label products are good for customers and offer more choice.

Amazon told BBC: “We strictly prohibit our employees from using vendor-specific non-public data to determine which private label products to launch.”

The company also wanted to point out that it already publishes data on how well some products sell online (just go to the “Movers and Shakers” section of the website).

How will it affect you?

Amazon critics believe this is a time that will set the boundaries of what is legally acceptable on the online market.

But it’s still not entirely clear – even if Amazon were to be fined – how this would affect Amazon’s business mode or online shopping more generally.

Augustin Reyna, of the European Consumer Organization, told the BBC: “The question is more, in the medium to long term, if Amazon were allowed to continue with these practices, consolidating its position on the market, it would be able to limit the choice and increase the prices “.

Which neighbor?

A debit card could be published as soon as this week.

However, the European Commission has tight lips: currently it will only say that the investigation is “ongoing”.

In theory, Amazon could be fined 10% of its global revenue if found guilty of violating competition law – around £ 15 billion ($ 19 billion).

Even for Amazon it would be an attractive sum.

But don’t expect it to happen overnight. It is unlikely that we will have a judgment until next year soon. And even if Amazon is fined, it can – and almost certainly would – appeal.

Can Amazon Relax?

Well no. Other countries have become interested in the EU’s muscular approach to large technologies.

In 2017, for example, the EU fined Google £ 2.1 billion for allegedly burying Google searches for rivals.

Rather than falling in love, seduced even by tech titans, the EU has clearly been unimpressed by some of their behavior.

And this is being canceled. Over the weekend, officials in California and Washington were also reportedly reviewing Amazon’s business practices with respect to third-party vendors.

A number of other anti-competitive investigations are also ongoing in the United States looking at Amazon and other major tech companies, such as Facebook and Google.

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