The European Union is taking antitrust action against Amazon, WSJ reports. The bloc’s top antitrust enforcer, the European Commission, “a charge sheet against Amazon alleging that the company uses nonpublic data it gathers from third-party sellers to unfairly compete against them.”
But Wait, There’s More: The EU is also opening a new investigation focused on how Amazon selects which vendors default for a given product. The implication is that sellers who pay the tech company extra are more likely to get top billing.
It Dates Back To June: Back then, WSJ reported the EU was planning some form of action against Amazon and that its antitrust regulator had circulated a draft of the charge sheet.
Don’t expect results anytime soon. A decision on whether Amazon violated European antitrust laws is expected next year.
Suppose Amazon is found to have broken competition laws. In that case, the European Commission can compel Amazon to “change its business practices and fine it as much as 10% of its annual global revenue—or up to $28 billion, based on 2019 numbers.”
- Amazon can refute any decision in an EU court, though.
The Big Picture: Amazon isn’t the only one facing this kind of scrutiny. The Trump administration recently filed an antitrust case targeting Google, which includes Apple in the crosshairs. China also unveiled its own anti-competitive measures Tuesday to curb the monopoly power of big tech firms.
I don’t think that making Amazon compete fairly with other sellers on the platform will sink the company’s future growth prospects. Amazon can still be the “homepage of shopping,” which will be very valuable. Also, remember that the majority of $AMZN’s earnings come from its cloud AWS business.