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Article written by Haim Ravia, Dotan Hammer and Adi Shoval
The EU Commission announced that following an initial investigation against Amazon, the eCommerce giant was found to have violated EU antitrust law.
At the heart of the investigation lies the fact that Amazon serves both as the operator of the trading platform, and as a merchant of products that Amazon itself manufactures and sells. The EU Commission launched the investigation against Amazon in July 2019, following allegations that by leveraging Amazon’s position as the platform operator, it uses data it is exposed to about the best-selling products on the platform to manufacture similar products at lower prices. Amazon allegedly uses its power to reduce its business risks, increase profits, and restrain competition against it.
The Commission’s investigation focused on Amazon’s operations in France and Germany, where it has significant market power. The Allegations against Amazon could constitute a breach of the Treaty on the Functioning of the European Union (TFEU), exposing Amazon to a fine of up to 10% of the company’s global annual revenue.
The EU Commission also announced that it has launched another investigation against the company following complaints that Amazon unfairly prioritized itself and specific merchants that were awarded Amazon’s “Buy Box” feature on the platform. This feature, offered to the platform’s premium users, introduces certain products in a much more central and prominent location on the platform and allows users to more quickly add those items to their shopping carts. A “Buy Box” featured product significantly increases the product’s sales and gives the merchant access to the platform’s premium consumers, who tend to purchase more products.
CLICK HERE to read the EU Commission’s statement regarding the investigations against Amazon.
