Amazon’s business model is under the spotlight in Europe after the EU’s antitrust watchdog launched a preliminary investigation into how the platform uses data about merchants.
The informal probe concerns the e-commerce group’s dual role as a competitor but also host to third-party merchants, which sell goods on Amazon’s websites, Margrethe Vestager, EU competition commissioner, said on Wednesday.
The move came on the same day that Brussels ruled that an arrangement between McDonald’s and Luxembourg, which allowed the fast food group to pay almost no tax on its European royalties in both the EU and US, did not break the bloc’s laws.
In the case of Amazon, the commission sent questionnaires to merchants this week to gather information. The action was not prompted by a complaint but rather initiated based on the commission’s own market observations and the results of its e-commerce sector inquiry completed in 2017.
Preliminary investigations can sometimes lead to a formal investigation. Google’s antitrust troubles began with an informal probe in 2010
Amazon’s website sells its own products as well as those from other businesses. Its marketplace business lists the products of third-party sellers on its websites, alongside the company’s own items. The independent sellers can choose to use some or all of the platform’s fulfilment, payment and advertising services.
Last year, for the first time, more than half of all items sold on Amazon came from third-party merchants, chief executive Jeff Bezos told shareholders earlier this year. European businesses used the service to export more than €5bn worth of goods last year, according to company figures.
Amazon earns revenues for the services it provides but also benefits because the third-party sellers increase the selection and range of products available on Amazon’s websites. The independent sellers can expand their reach and start selling online with limited initial investment.
Although EU officials have stressed that this is not a formal probe, the action indicates that the commission does have concerns.
The questionnaires will be returned in the next month or two, after which time EU officials will determine their next steps, if any.
Amazon declined to comment. The company has in the past played down antitrust concerns, noting that it competes in large markets with multiple competitors and that online sales are a small fraction of the overall retail market.
At an event in Washington last week, Mr Bezos said he was not concerned about growing scrutiny of the company.
“All big institutions of any kind will be and should be scrutinised,” he said. “We are so inventive that whatever regulations are promulgated, that will not stop us from serving customers.”
According to a voluntary transparency register, Amazon spent up to €2m lobbying in Brussels in 2017. That is significantly less than the $13m it spent on US lobbying last year, according to the Center for Responsive Politics.
The European registry shows that Amazon has a staff of 10 working on EU policy issues. Google, by comparison, has 14 people involved in policy and spent up to €5.5m last year, the most of the big US tech companies.
n the US, Amazon has assembled the biggest lobbying team of any technology company in Washington as it has expanded into new businesses, including grocery stores, advertising and healthcare, and come under attack from President Donald Trump. It doubled its number of in-house lobbyists to 28 this year from 14 before Mr Trump’s election, according to data compiled by the FT.
