Amazon.com Inc. faces a formal antitrust complaint from the European Union, an important step in a long-running investigation that could pave the way for massive fines or changes to the company’s business model.
EU regulators will send Amazon a so-called statement of objections in the coming weeks amid concerns the U.S. retail giant may be shortchanging smaller merchants who sell on its marketplace, according to a person familiar with the case who spoke on condition of anonymity.
The complaint is expected to lay out investigators’ evidence into Amazon’s alleged misuse of merchants’ data on the online sales platform. It will also let Amazon defend itself against the charges, the first and main opportunity to fight back against the EU case before officials rule on whether the company violated antitrust law.
The world’s biggest online retailer is one of several technology firms that have attracted the scrutiny of the EU’s powerful competition watchdog. Regulators are wrestling with how to act against online giants that critics say run a rigged game when they set the rules for platforms that also host their rivals.
EU officials have quizzed online merchants over the past year and a half to build a picture of how Amazon competes with its own sellers to win the “buy box” on its website. The coveted designation determines which offer — whether from Amazon’s own inventory, or that of a third-party merchant — is displayed to shoppers as the default option to buy a particular product.
As the operator of the platform, Amazon controls a valuable trove of data of customer shopping habits and hit products, information that can help it jump ahead of smaller sellers. It’s also increasingly pushing its own line of private-label products, and critics have highlighted cases in which Amazon appeared to roll out copies of bestsellers offered by others. The Wall Street Journal in April reported that some Amazon employees had examined individual seller data when designing in-house products — prompting sharp questions from U.S. lawmakers.
Amazon also faces a Federal Trade Commission antitrust probe in the U.S. But the EU investigation is further along and seen as Amazon’s first big test amid widening global scrutiny of the power of U.S. tech firms.
Online merchants “expect the EU to clearly punish” Amazon for behavior they see as harmful, said Oliver Prothmann, the head of BVOH, the German association of online trade.
“All merchants are certain that Amazon is using the merchants’ data to make anti-competitive decisions for its own business,” he said in an email. “Amazon has repeatedly caused merchants to be blocked” without proper warning, he said.
Amazon declined to comment, referring to a statement last year pledging to “cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.” Amazon has also said private-label products represent about 1% of its retail sales and that its policies prohibit the teams developing Amazon products from using data from individual sellers.
The Wall Street Journal earlier reported that the EU would send a statement of objections next week or the week after. The commission’s press office declined to comment beyond confirming that the investigation is ongoing.
EU antitrust probes haven’t always opened the way to more competition. Google’s smaller rivals complain that the company hasn’t had to cede much despite a decade of EU probes and $9 billion in penalties.
Regulators are looking for new antitrust powers that could order changes without fines and are seeking rules for so-called gatekeeper platforms that could curb the power of big tech.
Google, Facebook Inc. and Apple Inc. have also attracted fresh EU attention over how they might push users to their own services over competitors.