Report: EU Nears Amazon Antitrust Probe

Credit: Julie Clopper / ShutterstockCredit: Julie Clopper / ShutterstockIt's a good thing Amazon got its Prime Day celebration out of the way on Monday. Bloomberg today reported that the European Union is planning to open a formal investigation into the retailer "within days" as part of its continued efforts to better regulate US tech companies.

The report claimed that EU competition division leader Margrethe Vestager has wanted to "escalate a preliminary inquiry into how Amazon may be unfairly using sales data to undercut smaller shops on its Marketplace platform" for months. If the anonymous sources are correct, Vestager will have finally gotten her way, allowing her to open a full antitrust probe into how Amazon manages its online marketplace.

It's easy to forget that Amazon lets other companies sell products on its website. Many products are sold by the company itself, and many of the ones sold by third-party merchants are fulfilled by Amazon regardless. The company benefits either way, but it gets a greater cut of the profit for its own sales, which means it has a clear incentive to convince shoppers not to buy products from outside companies.

This wouldn't be the first time Amazon's been accused of anti-competitive practices. It's also faced EU investigations over tax practices and e-book sales. The difference now is that Vestager is said to be targeting the core of Amazon's business--its marketplace--rather than a secondary aspect of it. (Although much of the company's profit is actually derived from Amazon Web Services rather than its storefront.)

EU regulators have also been harder on US tech companies than in the past. The introduction of GDPR in 2018 also introduced stricter rules to protect the privacy of European citizens alongside higher maximum fines to encourage companies to abide by those rules. Amazon would merely join Google, Facebook, and Apple on the list of companies that are currently facing antitrust probes in the EU for their practices.