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Amazon Issues Proposals to Avoid Antitrust Fines in EU

Business

Amazon Building | Image by Sundry Photography/Shutterstock

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Online retailer Amazon issued a series of proposals on Monday in an attempt to avoid massive antitrust fines from European Union (EU) regulators.

The investigation began in 2019 and is centered around allegations from the EU that Amazon uses private research data to “unfairly compete” with marketplaces in France and Germany.

“The Commission’s preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany – the biggest markets for Amazon in the EU,” the European Commission wrote in a statement in 2020.

The company announced three proposals on Monday in hopes of resolving the investigation without having to pay a fine or submit to business restrictions imposed by the EU.

First, the company would make some (but not all) of its seller marketplace data available to the rival companies.

Secondly, Amazon’s commercial arm would be restricted from using data gathered through the company’s retail division.

Finally, the “buy box” on the company’s website that the EU claim gives preferential treatment to Amazon’s own items and third-party sellers who use Amazon Logistics would be revamped.

When shoppers visit Amazon now under the present system, the “Add to Cart” and “Buy Now” buttons choose Amazon itself as the default supplier.

The process involves more steps if a customer wants to purchase an item from a different seller whose products are distributed by the company itself and not through Amazon.

Under the new plan, Amazon would add a second “buy box” for items available through third-party sellers, giving consumers a more direct choice.

The move comes as Amazon attempts to avoid being found guilty of antitrust violations by the European Commission, whose verdict is expected to be handed down by the end of the year.

Should it be found guilty, Amazon faces a potential fine equal to 10% of its global revenues.

According to Statista, a German company specializing in corporate and market data, Amazon’s global revenue for 2021 was just short of $470 billion. Based on this figure, the company’s potential fine would be approximately $47 billion.

The European Commission is expected to consult rival companies and users over the coming weeks before formally responding to Amazon’s proposals. This could lead to adjustments to Amazon’s plans.

A final decision on this particular antitrust case is expected to come by the end of the year. However, the European Commission recently announced new legislation that would expand the executive arm’s ability to prevent what they see as anti-competitive behavior.

The Digital Markets Act (DMA) is aimed at preventing antitrust activities by Big Tech companies, primarily by giving the commission more power to investigate and levy punishments.

The DMA is expected to fully take effect by October of this year.

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