On 17th July 2019 the EU Commission opened a formal antitrust investigation into Amazon and whether Amazon is using sensitive data it obtains from independent retailers which sell on Amazon Marketplace in breach of the EU competition rules. This formal probe had been widely expected for some time as the EU Competition Commissioner, Margrethe Vestager, had already signalled in September last year that the EU Commission was looking into Amazon’s conduct with a view to deciding whether to launch a formal investigation. This latest investigation comes alongside parallel investigations in a number of other EU member states and by the FTC and DOJ in the US.

This is a particularly interesting test case as it concerns the competition law treatment of online market platforms. The EU Commission and other national competition authorities have been concerned about the power on line market platforms and their use of data for some time.


The Commission published a report by three special advisers in April 2019 entitled “Competition Policy for the Digital Era” (“the Digital Era Report”). The Digital Era Report highlighted, among other things, possible competition issues in relation to the existence and operation of digital platforms. It concluded that due to the characteristics of the market only a limited number of platforms are able to successfully survive and this has consequences for competition policy. The authors were particularly concerned about the ability of these platforms to become dominant and to use that position to foreclosure others from the market. Many platforms which occupy a dominant position have strategies to limit the threat of market entry, or expand their market power into neighbouring markets. In relation to promoting competition in the market the report highlights the restrictive effect of Most Favoured Nation (“MFN”) or best price clauses. In the case of platforms, the suppliers of goods or services often fix the price. Hence, to protect their investment, on line market platforms impose a requirement that goods cannot be sold through other channels at lower prices. These clauses can have both pro- and anti-competitive consequences and their effects depend on the characteristics of the markets. However in many cases they can distort competition to the detriment of consumers as they align prices and prevent consumers able to shop around for better terms .In addition platforms may restrict traders that use their platforms using or being listed on other platforms (so called “multi-homing”) not only by contractual bans but also through restrictions on data portability or limiting interoperability. It is essential that multi-homing and switching are possible and that dominant platforms don’t impede it.

Secondly the Digital Era Report argues that it is equally important to protect competition on a dominant platform itself. Platforms play a form of regulatory role as they determine the rules according to which their users, including consumers, business users and providers of complementary services, interact, and, when they are dominant, have a responsibility to ensure that competition on their platforms is fair, unbiased, and pro-user. In this last respect there is a potential conflict of interest where the platform sells its own goods and services in direct competition with other traders on its platform.

EU Commission View

On 3 June 2019, the European Commission published a speech by Margrethe Vestager, on competition and the digital economy to the OECD /G7 Conference in Paris In that speech she emphasised the importance of digitisation for our economy and the need for competition policy to tackle the threats to competition that come from digitisation. In her remarks she mentioned the need to preserve competition with dominant platforms and more particularly to keep an eye on the use of MFN clauses and to ensure multi-homing which had been the central recommendations in the Digital Era Report. However the focus of her remarks related to the interoperability between, and leveraging of, the power of digital platforms. The Commissioner stated that perhaps the biggest threat to competition and innovation comes from platforms that are not just a single business, but the centre of large empires. That means that a platform business runs an ecosystem of related products, which all work seamlessly together. This can be good for consumers. However, if successful integration depends on customers getting all services from the same company, that can make it hard for smaller rivals to break into the market as they will need to be able to replace the whole ecosystem. She concluded that interoperability can be vital to keep markets open for competition. With dominance comes the ability of those platforms to leverage the power of their platforms into other markets. One of the biggest issues facing the Commission she revealed was that platform businesses can also compete in other markets, with companies that depend on their platform. That means that the very same business becomes both player and referee, competing with others that rely on the platform, but also setting the rules that govern that competition. Such a double role can bring a risk of a conflict of interest; a risk that the operator of a platform will be tempted to tweak the rules and features of the platform to benefit its own services.

It is this conflict of interest that lies at the heart of the Commission’s investigation into Amazon.

EU Amazon investigation

On 17 July 2019, the European Commission announced that it has opened an in-depth investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on its marketplace is in breach of Article 101 and/or Article 102 of the TFEU. Amazon has a dual role as a platform: (i) it sells products on its website as a retailer; and (ii) it provides a marketplace where independent sellers can sell products directly to consumers. When providing a marketplace for independent sellers, Amazon continuously collects data about the activity on its platform. Based on their preliminary investigation the Commission concluded that Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions- on the marketplace for its own advantage.

As part of its in-depth investigation the Commission stated that they will look into: – the standard agreements between Amazon and marketplace sellers, which allow Amazon’s retail business to analyse and use third party seller data. In particular, the Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition. – the role of data in the selection of the winners of the “Buy Box” and the impact of Amazon’s potential use of competitively sensitive marketplace seller information on that selection. The “Buy Box” is displayed prominently on Amazon and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” seems key for marketplace sellers as a vast majority of transactions are done through it.

If as a result of the formal investigation the practices under investigation are proved to breach EU competition rules on anticompetitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union (TFEU)) and/or on the abuse of a dominant position (Articles 102 TFEU) Amazon could be subject to substantial financial penalties, cease and desist orders to stop certain commercial practices or orders to change their commercial practices.

Commissioner Margrethe Vestager, said: “European consumers are increasingly shopping online. E-commerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”

Legal Basis of Investigation

The Commission is undertaking its inquiry under Article 101 of the TFEU prohibits anticompetitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market. If the Commission finds that there are terms of an agreement or arrangement between Amazon and its users or other third parties who appreciably restrict competition then the Commission would take action for breach of Article 101.

The inquiry is also looking into potential abuses of a dominant position by Amazon under Article 102 of the TFEU. If Amazon is found to impose or conduct certain anti-competitive business practices that adversely affect user or competitors of Amazon Market Place the Commission can find such behaviour a breach of Article 102 TFEU . There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.

Member State competition authorities (“NCAs”) also have concurrent powers to investigate breaches of Article 101 and 102 alongside the Commission. However Article 11(6) of the Antitrust Regulation (Council Regulation No 1/2003) provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions that would conflict with a decision contemplated by the Commission in proceedings it has initiated. However there have been a number of member state competition authority investigations already started against Amazon. Nevertheless these are not related to the issues under investigation in this case. The Commission has been liaising with the NCAs in the European Competition Network to ensure there is adequate coordination and no overlapping investigations. We have set out below a description of the other NCA investigations which are currently being pursued against Amazon.

NCA and Other Investigations

Alongside the Commission’s investigation national competition agencies in Germany, Austria, Luxembourg and Italy have also launched investigations into the ecommerce giant. However their investigations focused on different aspects of suspected abuse and were coordinated by the European competition regulators body, the European Competition Network. The Italian Competition Authority conducted dawn raids on five Amazon companies in April 2019. The Italian case appears to be based upon suspicion that third-party vendors that used the firm’s logistics services – ‘Amazon Logistics’ or ‘Fulfilment by Amazon’ – were granted better visibility for their offers, and other improvements to their sale on, compared to sellers who were not clients of Amazon Logistics.

The German Bundeskartellamt’s probe – launched in November 2018 focused on Amazon’s business terms towards sellers on its German website. The Austrian Competition Authority investigation which commenced in February 2019 looked into the company’s dual role as a marketplace and a seller in relation to concerns of unfair trade practices in the form of discrimination against Austrian retailers on the platform. However both the German and the Austrian investigations were closed prior to the Commission announcing its inquiry on 17th July Amazon committed to changing its terms and conditions for traders on its Marketplace in response to these complaints.

The Luxembourg probe, launched in early April, covers both the potential anticompetitive practices through data collection , as well as the unfair trade practices investigated in Germany and Austria.

In addition to the parallel national competition investigations the Commission has been in a constant dialogue and communication with the US Federal Trade Commission’s (FTC) newly instituted tech task force on Amazon. The FTC created a task force in February this year to start reviewing pending and consummated technology mergers, with the intention to develop a body of knowledge on the sector to inform future decisions. In a sign of increasing potential divergent regulatory positions over the Atlantic the Trump Administration’s Justice Department entered the debate over the operation of online platforms.

On 24th July 2019 The US Justice Department has announced it was launching an investigation into leading online platforms, examining whether they are unfairly restricting competition. The DoJ announcement did not name any firms, but companies such as Facebook, Google, Amazon and Apple are likely to be scrutinised in the wide-ranging probe. The DoJ said it was sparked by “widespread concerns” about “search, social media, and some retail services online” The DoJ has sweeping powers to investigate firms it suspects of breaching competition laws, and it can even break up companies that it thinks are too dominant. Once both the DoJ and the FTC have concluded their investigations it is going to interesting to see whether they are going to take a divergent regulatory approach and if so how those positions are going to be reconciled.


The increasing power of on-line market platforms is something that can no longer be ignored by competition law regulators worldwide.

Both the European and US investigations into the market power of platforms show that regulators are now grappling with how to police the activities of online market platforms and to ensure that the interests of consumers and traders that use those platforms are adequately protected. This is not going to be an easy task.

This article was first published in Lexis Nexis CSR