EU accuses Amazon of distorting competition

The European Commission accused US tech giant Amazon of breaching the European Union's antitrust rules by distorting competition in online retail markets.

The commission said on Tuesday it has informed the Seattle-based company of its preliminary view.

The commission said it takes issue with Amazon systematically relying on nonpublic business data of independent sellers who sell on its marketplace to benefit Amazon's own retail business, which directly competes with those third party sellers.

The commission also opened another formal antitrust probe into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

"We must ensure that dual-role platforms with market power, such as Amazon, do not distort competition," said Margrethe Vestager, the European Commission's executive vice-president in charge of competition policy and digitization.

The official has gained a reputation for being tough on US tech giants since she began her job at the last European Commission.

Vestager said data on the activity of third party sellers should not be used to benefit Amazon when it acts as a competitor to these sellers, and the conditions of competition on the Amazon platform must also be fair.

"Its rules should not artificially favor Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services," she said.

Vestager argued that 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.

The value of online sales in Europe has been growing steadily and almost doubled in the last five years, now approaching 720 billion euros ($849 billion) this year, compared to 375 billion euros ($442 billion) in 2015.

Center of booming market

Amazon is at the center of this booming market.

More than 70 percent of consumers in France and over 80 percent of consumers in Germany that shopped online bought something from Amazon in the last 12 months, according to the European Commission.

"We do not take issue with the success of Amazon or its size. Our concern is a very special business conduct, which appears to distort genuine competition," Vestager said.

She emphasized that EU's concerns are not only about the insights Amazon Retail has into the sensitive business data of one particular seller, but the insights it has about accumulated business data of more than 800,000 active sellers in the EU, covering more than a billion different products.

Amazon has several weeks to respond to the preliminary charges.

In a statement, Amazon said it disagreed with the European Commission's preliminary views.

"Amazon represents less than 1 percent of the global retail market, and there are larger retailers in every country in which we operate," the company said.