On 10 November 2010, the European Commission informed Amazon that it considers the company to infringe EU antitrust rules by using non-public data of independent retailers. The European Commission has also opened a second antitrust investigation into Amazon’s e-commerce practices regarding the „Buy Box“ and the Amazon Prime offer.
Background
On 17 July 2019, the European Commission (Commission) opened an investigation against Amazon, the renowned US listed online platform operator and retailer. According to the press release with regard to the opening of the investigation, the use of non-public independent seller data by the online platform operator and the role of data in the selection of retailers displayed in the „Buy Box“ will be subject to antitrust scrutiny.
On 10 November 2020, the Commission issued a Statement of Objections against Amazon based on its preliminary findings. According to the notification of the Commission, its preliminary view is that Amazon’s market conduct distorts competition in online retail markets in violation of EU antitrust rules.
The notification of the Statement of Objections is a formal step in the procedure. Undertakings concerned by the investigation can then access the case file, submit written comments on the preliminary allegations and request an oral hearing. The Statement of Objections, like the formal procedure itself, shall not in principle prejudge the outcome of the investigation.
The Commission has also opened a second antitrust investigation to examine Amazon’s e-commerce practices concerning the „Buy Box“ and the Amazon Prime label. In particular, the Commission is investigating whether Amazon prefers its own retail offers as well as those of certain marketplace vendors, thereby possibly abusing a dominant position.
Preliminary competition law assessment of the current investigation
Amazon has a dual role as an online marketplace and platform: on the one hand, the company provides an online marketplace for independent sellers, and on the other hand, it acts as a competing retailer on the same marketplace.
The Commission’s preliminary investigation result has shown that, as an online platform operator, Amazon has access to very large amounts of non-public business data of independent retailers. This big data includes, for example, the number of ordered units of products, the third party sellers‘ revenues on the marketplace, the number of visits to sellers‘ offers, data relating to shipping and consumer rights claims such as warranty claims. This data flows directly into Amazon’s automated systems, where it is aggregated and processed. According to the Commission’s preliminary view, outlined in the Statement of Objections, Amazon uses this information for its own consumer offers and strategic business decisions. This is to its own advantage over competing third party sellers, as it allows Amazon to focus its offers on bestsellers or to remove poorer performing product categories from its online shelf. As a result, the platform operator could avoid its business risks as a retailer and further strengthen its dominant position in the market place services sector in the largest EU markets, France and Germany. Should this result be confirmed in the course of the Commission’s further investigation, the Commission’s preliminary view was that this would constitute an abuse of a dominant position prohibited by Article 102 TFEU and be subject to a fine.
Subject of the second investigation
The second investigation opened by the Commission will examine in detail the criteria for awarding the shopping „Buy Box“. Specifically, it will investigate whether this leads to preferential treatment of Amazon itself and of those marketplace retailers that use Amazon’s logistics and delivery services. By means of the „Buy Box“, customers can put certain products directly into their shopping cart. For marketplace retailers, the assignment of this box or the display of their offer in the „Buy Box“, respectively, is of great importance, because only the offer of the respective seller for a specific product is displayed therein, and the majority of all Amazon platform sales are now made via this box.
In the second investigation, the Commission will also investigate whether retailers ultimately have the possibility to effectively reach Prime customers. As the number of Prime users is constantly increasing and they are among the best buyers on the Amazon online platform, it is crucial for the retailers to be able to effectively reach these customers. Any distortions of competition in this respect may also be qualified by the Commission as abuse of market dominance under Article 102 TFEU and fined.
Assessment | Impact on Switzerland
The outcome of the case is of great interest, as the investigation addresses already much debated and challenging issues of antitrust law in the digital economy. In particular, the Commission’s decision is expected to shape the assessment of digital platform markets.
The Swiss Competition Commission (COMCO) has not (yet) addressed Amazon’s commercial practices. In view of the fact that Amazon is presumably operating in Switzerland in the same way as in the rest of Europe and that Commission decisions are ultimately not binding on Switzerland, the opening of proceedings cannot be ruled out. In similar cases, however, the COMCO did not intervene, arguing that the commitments undertaken in the EU in the context of an investigation would be voluntarily accepted by the undertaking concerned also with regard to Switzerland. This may even be the case with regard to possible behavioural commitments. However, this is unlikely to be the case with regard to possible damage claims. Swiss undertakings that assessed possible civil damage claims for example in the context of the European proceedings on the truck cartel are likely to confirm this at least in part.
