Does Amazon Hurt Competition By Using Sellers' Data? Europe Investigates The European Union's antitrust arm will evaluate Amazon's role as both a retailer and a marketplace for others. One focus will be on Amazon's use of data collected from third-party sellers.

EU Investigates If Amazon Hurts Competition By Using Sellers' Data

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MARY LOUISE KELLY, HOST:

The European Union opened an antitrust investigation today into Amazon. The EU regulators' central question is this. Does the Internet giant stifle competition by exploiting data it collects from other companies for its own benefit? NPR's Alina Selyukh reports the EU is focusing on Amazon's dual role as a seller and a platform for other sellers.

ALINA SELYUKH, BYLINE: Amazon likes to present itself as a cultivator and supporter of small- and medium-sized businesses. It likes to highlight that most of its sales are products from other companies. These other merchants pay Amazon fees to sell on its platform. They also share a lot of their data with Amazon.

(SOUNDBITE OF PRESS CONFERENCE)

MARGRETHE VESTAGER: And the question here is about the data.

SELYUKH: That's EU Competition Commissioner Margrethe Vestager speaking about Amazon at a press conference in September. That's when her team at the European Commission started surveying the merchants who contract with Amazon. This research would later show that Amazon appears to use, quote, "competitively sensitive information" about the sellers, their products and transactions.

(SOUNDBITE OF PRESS CONFERENCE)

VESTAGER: Do you then also use these data to do your own calculations, as, what is the new big thing? What is it that people want? What makes them buy things?

SELYUKH: As in, does Amazon use the data it collects to its own advantage or in other anti-competitive ways? Now the European Commission is officially investigating that. This adds to a push by authorities on both sides of the Atlantic to regulate how tech giants use the data of people and organizations on their platforms. The EU has led the charge with a sweeping privacy law and several fines against Google. And just today, German antitrust regulators announced a deal with Amazon to settle their own investigation into the marketplace. As a result, Amazon will make changes to the business terms it offers sellers and not just in Germany but worldwide. Amazon's use of data from sellers also came up this week at an antitrust hearing in Congress.

(SOUNDBITE OF ARCHIVED RECORDING)

NATE SUTTON: And we don't use individual seller data to directly compete with them.

SELYUKH: That's Amazon lawyer Nate Sutton carefully wording his answer.

(SOUNDBITE OF ARCHIVED RECORDING)

SUTTON: The algorithms are optimized to predict what customers want to buy, regardless of the seller.

SELYUKH: A note - Amazon is one of NPR's financial supporters.

In a statement, the company says it will cooperate fully with the EU regulators. If the EU finds Amazon in violation of Europe's competition rules, the retailer could face fines of up to 10% of a year's worth of global revenue. For Amazon, that could be tens of billions of dollars.

Alina Selyukh, NPR News.

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