In brief: The European Union’s competition commissioner is said to launch an antitrust investigation into Amazon soon, building on top of a previous probe into the company’s practices around using data from third-party sellers, which could help it gain an unfair competitive advantage.
If you haven’t been living under a rock, you may be familiar with the image of Margrethe Vestager and her five-year-long battle against U.S. tech giants and their 'abusive practices' in Europe. A Bloomberg report says the competition commissioner is readying her last blow for the end of her current term against Amazon, with a formal announcement expected in the next few days.
The investigation shouldn’t come as a surprise to anyone, as Vestager had already launched a preliminary probe last year into Amazon’s business model. In a CNBC interview, she commented on how the company is using Amazon Marketplace to host small third-party sellers, while also being their biggest competitor.
Amazon’s second-largest market, Germany, started its own probe into the company after receiving a storm of complaints from small retailers who feel at a disadvantage. They strongly believe that using the company’s platform would give it valuable insight into what products are popular, allowing it to undercut their prices and effectively stunt their growth.
It’s worth noting that across the ocean, the U.S. FTC has also taken a keen interest in how the company uses that data, on top of looking into how the company might be abusing its fulfillment service.
Google has been slapped by the E.U. with a combined $9 billion in fines, and Apple has been made to pay $16.7 billion in back taxes. On the surface, this might look like someone is finally making big tech accountable for its abuses. Dive a little deeper and you will find companies like Facebook that actually get a boost in their valuation after getting fined $5 billion even though in absolute terms it is no small sum.