Amazon in spotlight over alleged sales boost using third-party seller data - Just Style
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Amazon in spotlight over alleged sales boost using third-party seller data

By Georges Corbineau 21 Sep 2018

The EU competition watchdog is mulling a probe into the way Amazon uses data from its third-party sellers on the back of concerns it could be using it to boost its own retail sales.

Amazon in spotlight over alleged sales boost using third-party seller data

The EU competition watchdog is mulling a probe into the way Amazon uses data from its third-party sellers on the back of concerns it could be using it to boost its own retail sales.

At a press conference in Brussels on 10 September, EU Competition Commissioner Margrethe Vestager voiced concerns of a conflict of interest between the online marketplaces role as both a seller and a retailer competing for business.

“Our sector inquiry showed that some platforms – which play a double role, both as marketplaces and sellers in their own right – might collect sensitive data about products that are sold by others through the marketplace. And they might use that data to boost their own sales of the same products, at the expense of sellers on the marketplace. So we’re looking right now to see if there is a real issue here under the competition rules.

“Many small retailers use digital platforms – like marketplaces and social networks – to reach consumers online. Our sector inquiry showed that nearly 90% of professional sellers on those markets are very small indeed, with sales of less than EUR50,000 a year. And that means that the relationship between platforms and their business customers can be very unequal – and the terms they face can be unfair.”

Vestager did, however, say no formal case had yet been launched against Amazon  – instead, the watchdog has sent out questionnaires to the involved parties to get the “full picture”.

In its first-quarter earnings report for this financial year, Amazon reported revenues from third-party seller services, which includes commissions, fulfilment and shipping fees of US$9.3bn, up 44%, and accounting for 18% of total sales.

It is understood half of all items sold on Amazon come from small and medium businesses, while in the UK, for example, third-party sellers sold more than GBP2.3bn in 2017 outside of the UK, up 22% year-on-year. The company also offers services like pan-European FBA, which allows third-party sellers to send products to the Amazon fulfilment centre in the country of their choice and the products are then distributed across Europe, at no extra cost, as a way of providing fast delivery to customers.

Amazon’s dual-role as a seller itself and a platform for third-party sellers has been under the spotlight for some time. In a July interview with newswire Bloomberg, US President Donald Trump said Google, Amazon and Facebook could represent “a very antitrust situation”.

This has since prompted the US equivalent to the EU competition authority, the Federal Trade Commission, to take a look at its own methods for handling competition and consumer protection law based on new technology development.

Amazon declined to comment on the probe.