Brussels looks at Amazon seller data collection

The European competition commissioner has expressed concerns about how Amazon uses data collected from third party merchants hosted by the e-commerce firm, although she did not report any wrongdoing.

Margrethe Vestager said the European Commission was asking preliminary questions about Amazon’s merchant data collection practices, but had not launched a formal competition inquiry.

Amazon lets third party firms sell on its site and ship goods to customers via its 100 or so fulfilment centres around the world. The company has previously said this helps smaller outfits expand globally. Third party merchants in the UK sold £2.3 billion of goods in 2017 outside of the UK; German sellers earned €2.1bn outside Germany during last year, according to Amazon.

Altogether, European firms sold more than €5bn in products via Amazon’s marketplace last year. The e-commerce giant quite legitimately collects data about these transactions.

At a press conference (about the dropped Luxembourg/McDonald’s state aid case) in Brussels on Wednesday, Vestager was asked by a journalist if she was “looking into” any “antitrust concerns” about Amazon. Vestager replied:

“Yes. The question that people have been asking increasingly, and we’ve also seen it ourselves in the market, is you have these platforms that have a sort of dual purpose. They’re both hosting a lot of merchants, to enable the smaller guy to have his business be found [and handle his e-] commerce. And at the same time, they themselves are merchants. Big merchants. So they’re both hosts and they also do the merchant business themselves.

“And the question here is about the data. Because if you, as Amazon, get the data from the smaller merchants that you host--which can be of course completely legitimate because you can improve your service to these smaller merchants--well, do you then also use these data to do your own calculations as to what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things?

“And that has made us start a preliminary… well, it is very early days in this antitrust investigation into Amazon’s business practices. We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full.

“As I said, these are very early days. We have no conclusions, we haven’t formally opened the case. But we’re trying to make sure that we sort of get the full picture, because we saw it in our own sector inquiry, and this is also what a lot of people are talking about”.

As the Financial Times noted on 19 September:

“Preliminary investigations do not always lead to a formal investigation. Google’s antitrust troubles began with an informal probe in 2010.”

Amazon told Delano on 21 September that it did not have any comment at the moment.