Commission investigates Amazon’s use of merchant data

Commission investigates Amazon’s use of merchant data

The European Commission has launched an antitrust investigation into Amazon’s use of the data it collects from retailers that sell through its platform.

The investigation is at a preliminary stage. The Commission does not rule out that the collection of data by Amazon might be legitimate such as when used to improve Amazon’s services to merchants. But it says that the practices could strengthen Amazon’s competitive position.

The challenge is that Amazon operates both as a distribution platform to give smaller retailers access to customers, while at the same time being a significant merchant in its own right.  It has grown beyond its 1995 origins as an online book retailer, expanding into other markets and launching virtual shopfronts which have allowed third parties to sell their goods.

The Commission has said that it is keen to get the full picture on how Amazon’s use of the data it collects through its platform may be a source of competitive advantage.  It should not lose sight of the fact that Amazon’s platform has provided a useful route to market for small and medium-sized businesses.

This is not the first time that the Amazon platform has been the subject of antitrust scrutiny in the EU. Member states such as Germany have warned against the antitrust risks of manufacturers limiting the ability of smaller retailers to sell through Amazon as this could lead to concentrated online environment dominated by the larger manufacturers and e-commerce platforms.