Margrethe Vestager, the European Competition Commissioner who has levelled two antitrust fines at Google, is turning her attention to another tech giant — Amazon.

EU antitrust regulators have begun a preliminary investigation into Amazon’s use of third-party merchant data.

Speaking at a news conference on Wednesday, Vestager noted no formal case has been opened and “it is very early days in this antitrust investigation into Amazon’s business practices”.

EU antitrust chief Margrethe Vestager
EU antitrust chief Margrethe Vestager

The potential conflict is between Amazon’s own first party retail offering and its marketplace where third party merchants sell products. The commission is looking into concerns that by acting as a ecommerce platform, Amazon may use seller’s data to boost sales of its own products.

“You have these platforms that have a dual purpose,” Vestager explained. “They are both hosting a lot of merchants to enable the smaller guy to have his business to be found and to do his commerce… at the same they themselves are merchants, big merchants.”

“The question here is about the data, because if you as Amazon get the data from the smaller merchants that you host — which can be completely legitimate because you can improve your service to these smaller merchants — do you then also use this data to do your own calculations as to what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things?”

The regulators have sent “quite a number of questionnaires to market participants in order to understand this issue in full,” Vestager said.

Globally, half of all items sold on Amazon’s site come from small- and medium-sized businesses.

Amazon’s marketplace has allowed the business to scale rapidly, offering a wider range of products at more competitive prices than one retailer could ever manage on its own. It has also allowed sellers to tap into a global marketplace where ecommerce infrastructure and logistics are taken care of.

However Amazon also sells its own private label products which at times compete with marketplace sellers.

Breaching EU antitrust rules can result in a fine up to 10 per cent of a company’s global annual turnover.

Earlier this year the EU issued Google a US$5 billion fine for abusing the dominance of its Android mobile operating system. In June last year Google was fined AU$3.57 billion for favouring its shopping service in search results. Google is appealing both decisions.

A third antitrust case, examining Google’s AdSense is still being conducted by the commission.

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