On 10 November 2020, the European Commission initiated a second antitrust investigation against US e-commerce giant Amazon, and issued a Statement of Objections in relation to an earlier procedure commenced in July 2019. The concerns raised by the European Commission in both investigations refer to Amazon’s dual role as a distribution channel for independent companies and a seller of its own products through the same proprietary platform. In particular, the company is being probed for unfairly favouring its own retail activities as well as those of third-party vendors who use Amazon’s logistics services, namely its inventory management, warehousing, shipping and customer service (so-called ‘Fulfillment by Amazon’). What is more, the undertaking would have been doing so by using commercial data on its competitors, routinely collected through its digital marketplace.

Firstly, the newly initiated procedure reinforces the hypothesis that Amazon has been abusing its dominant position derived from its leading role in Europe as an e-commerce service provider. Accordingly, this investigation covers the entire European Economic Area, with the sole exception of the Italian market. Secondly, and most importantly, the Statement of Objections notified to Amazon by the European Commission, which alleges an infringement both under Article 101 and 102 of the TFEU, focuses on the company’s use of non-public data of merchants operating on its platform. Also, in this case, although France and Germany are indicated as the most affected markets due to the volume of transactions, the scope of the investigation extends to the whole European Economic Area.

In detail, the Statement of Objections claim that Amazon used commercially sensitive information about third-party vendors’ sales (such as the number of orders and shipments for specific products, revenues, number of clicks to posted offers, overall complaints and returns, other performance metrics) to calibrate offers regarding its own products and make strategic decisions to the detriment of competitors. Once these information flows, to which employees have access, are aggregated into its automated systems, Amazon has the capability of using them to influence the visibility of its own products, or those of retailers using ‘Fulfillment by Amazon’ services. For instance, this may be achieved through mechanisms that assign the platform’s ‘Buy Box’ space — the online space through which most sales on Amazon take place — leading to a distortion of competition and an abuse of its position as market leader.

These claims are also relevant to the freshly launched procedure which is still at its preliminary phase. In fact, this specifically inspects the conditions and criteria governing the algorithms used to ‘award’ a period of stay in the ‘Buy Box’ amongst competing sellers, as well as the criteria for selecting the vendors allowed to offer products to customers belonging to the ‘Prime’ loyalty programme. The fact that the ‘Buy Box’ section of the marketplace’s interface shows the offer made by a single seller for each product searched by the consumer, is a crucial advantage as this product can be purchased directly with a single click. Similarly, having preferential access to ‘Prime’ users, who are statistically more active and constantly growing, is also very advantageous for vendors. It follows that it might represent a distortion of market competition to artificially favour the sale through these channels of Amazon products, or those of retailers who use Amazon’s logistics services, above all exploiting their non-public commercially sensitive data.

At this stage, the two procedures do not prove per se the existence of an infringement on the part of Amazon and, therefore, do not prejudice the possibility of an outcome contrary to the allegations made by the regulator. In any case, the Commission will continue its investigations as a matter of priority and it will be up to Amazon to begin presenting its defense, given that, if an infringement is confirmed, the company risks sanctions in the order of billions of Euros, up to 10% of its annual revenues in Europe. Alternatively, the company could decide to take a collaborative approach with the Commission in order to agree sanctions and remedies in exchange for leniency.