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$27bn Fine Possible As EU Puts Amazon In Competition Crosshairs

Amazon could be slugged with a fine in excess of $27 billion AUD in Europe, as the European Commission charges the ecommerce giant with abusing its power as an online platform.

The Commission has slammed Amazon for allegedly using non-public data from third-party sellers on its platform to calibrate sales strategy for its own retail business. Potential fines could go as high as 10 per cent of the company’s global turnover – about $27 billion AUD.

Margrethe Vestager, European Commission.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said Amazon must not be allowed to distort competition as a dual-role platform with market power.

“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.

“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 said.

The Commission is also investigating Amazon separately for allegedly giving preferential treatment to its own retail services and those of its “Fulfilled By Amazon” sellers in its “Buy Box”, which is displayed prominently on its website and allows customers to put items from specific retailers directly into their shopping carts; according to the Commission, being chosen as the Buy Box offer drives the “vast majority” of all sales.

Amazon has defended itself in a statement, saying its private-label products offer more choice to customers.

“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate.

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” it said.

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