Amazon on Wednesday became the target of an antitrust investigation by the European Union over its use of merchants’ data, underlining the increasing regulatory scrutiny over how tech companies exploit customers’ information.
Amazon, Google and Facebook are among U.S. tech giants that have triggered complaints from rivals and academics, prompting antitrust enforcers around the world to look at how they use data to boost their market power, which has also led to calls for their breakup.
WATCH: Amazon workers in Minnesota stage walkout on Prime Day protesting working conditions, safety
The European Commission has been seeking feedback from retailers and manufacturers since September last year into Amazon’s dual role as a marketplace for merchants and as a competitor. Merchants have complained about harm caused by Amazon copies of their products.
The commission said its investigation would focus on two issues. The first is Amazon’s standard agreements with marketplace sellers and the second is its use of data in choosing winners of the “buy box,” which allows consumers to add items from a specific retailer directly into their shopping carts.
European competition commissioner Margrethe Vestager, who can fine companies up to 10 per cent of their global turnover, said the issue was crucial as more and more Europeans shop 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,” she said.
Amazon said it would co-operate fully with the EU investigation. The company earlier on Wednesday reached a deal with Germany’s antitrust authority to overhaul its terms of service for third-party merchants.
Politico first reported the investigation last week.
The commission had been struggling to define the market in which Amazon operates in order to identify where the competitive harm could have been, sources said.
They said the issue was whether to look at Amazon in the overall retail market or in its own niche.
This would not be Amazon’s first run-in with the commission. Two years ago, it was told to pay back taxes of about 250 million euros ($280.35 million) to Luxembourg because of illegal tax benefits. That same year, it settled with the regulator over its distribution deals with e-book publishers in Europe.