Amazon Inc (NASDAQ:AMZN) shares fell on Tuesday after the European Union’s antitrust regulator unveiled formal charges against the e-commerce giant over its treatment of third-party merchants on its website.
The EU’s top antitrust official, Margrethe Vestager, has accused the company of illegally abusing its dominant position as an online marketplace in Germany and France after a year-long investigation into the firm by the European Commission found that Amazon has been feeding non-public seller data such as revenues and product orders into its own retail algorithms to help it decided what new products to launch and at what price.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition.
Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers”, Vestager said in a statement.
“The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services. 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”, she continued.
The Commission said that its preliminary view is that Amazon has breached antitrust rules by distorting competition in its online retail markets, adding that it has also opened a second formal antitrust investigation into a possible preferential treatment of Amazon’s own retail offers and those of marketplace sellers that use the firm’s logistics and delivery services.
If the Commission is able to successfully prosecute Amazon over these practices, the company could find itself facing a heavy fine and demands to change its behaviour in the European market.
Amazon isn’t the only Big Tech firm to find itself under pressure from EU regulators, with the bloc having fined search engine giant Google, owned by Alphabet Inc (NASDAQ:GOOG) around US$10bn previously for antitrust violations. Fellow big hitters Apple Inc (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB) are also facing their own fights with Brussels.
Shares in Amazon fell 3.2% to US$3,043 in mid-morning trading in New York.