European Union accuses Amazon of breaking competition law

BRUSSELS: The European Union (EU) formally accused US giant Amazon on Tuesday of abusing its control over an online marketplace to distort competition, a breach of anti-trust rules.

Competition commissioner Margrethe Vestager said Brussels had informed the company of its view and would push on with an investigation, while opening a second formal probe.

This second investigation will probe whether Amazon’s Prime service and the “buy box” that appears on the screen “artificially” push buyers into sellers using Amazon’s logistics service.

“We reached the preliminary conclusion that Amazon illegally has abused its dominant position as a marketplace service provider in Germany and France,” she tweeted, ahead of a news conference.

“Amazon may have used sensitive data big scale to compete against smaller retailers. Now for Amazon to respond.”

Shortly afterwards, she told journalists in Brussels: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition.”

Amazon sells its own products to retail customers through its web platforms, but also allows third-party sellers to use its marketplace for their wares.

Europe accuses the online giant, which made its founder Jeff Bezos the world’s richest man, of using the customer data it gathers to compete with third-party clients.

“Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services,” Vestager said.

“With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”

Vestager said that Amazon would have an opportunity to respond “in the coming weeks” but that they appear to be using their clients’ data to favour sales of its own products.

There is no time limit on the formal inquiry, nor on the second probe launched on Tuesday. But the European Commission has now sent Amazon “a formal statement of objection”.

This could lead to legal action.

“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts,” Amazon responded in a statement.

“Amazon represents less than one percent of the global retail market, and there are larger retailers in every country in which we operate,” it said.

“There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually and have created hundreds of thousands of jobs.”

In another development, India’s anti-trust watchdog has ordered a probe into Google’s payments app over allegations the tech giant is abusing its market dominance.

The Competition Commission of India said it was investigating allegations the California-based company “rigged” featured app lists to include Google Pay, “demonstrating clear bias”.

The ombudsman is also looking into a Google plan – to start from March 2022 – that requires some developers to pay a 30% commission on in-app purchases.

The move has sparked an outcry in India.

The case was filed by an anonymous complainant, the commission said, adding that its investigations unit would submit a report within 60 days.

Google has denied the allegations, and in a statement said its payments app was successful because it offers consumers a “simple and secure” experience.

Google Pay uses India’s Unified Payments Interface (UPI), which manages payment apps with over 140 Indian banks that are part of the network.

UPI is also used by Walmart’s PhonePe and the Alibaba-backed Paytm. The three dominate India’s digital payments market.

UPI processed nearly 11 billion transactions in 2019, with a monthly rate of US$31 billion in February leading to an annualised payment value of US$373 billion this year, according to S&P Global.

Google’s Android mobile operating system is by far the dominant player in India, supporting 99 percent of all smartphones, according to the research agency Counterpoint.

Analysts have said having such a widely used operating system could make it easier for Google to control the market, a claim the Silicon Valley firm denies. – AFP