On Tuesday, European Competition Commissioner Margrethe Vestager announced formal antitrust charges against Amazon over how the tech giant uses data about merchants on its platform, as well as a brand new investigation into the retailer.Īmazon has faced increasing scrutiny from regulators both in the EU and US, part of a broader backlash against Big Tech and the power that it wields. > Browse Our CoverageĪre you a current Insider Intelligence client? Log in here.Amazon is under fire in Europe. Join other Insider Intelligence clients who receive this Briefing, along with other Payments & Commerce forecasts, briefings, charts, and research reports to their inboxes each day.Want to read more stories like this one? Here's how you can gain access: But further growth could be hindered since the committee's recommendations would prohibit M&A activity, which could limit Amazon's revenue potential as well as its options to combat competitors in the market. Amazon has used these acquisitions to grow its brand and extend its reach into different consumer segments. Ceasing further M&A activity could stifle Amazon's growth potential. Amazon has acquired a number of brands and companies over the years, including Zappos and, more recently, grocery chain Whole Foods.The committee's recommendations include prohibiting dominant players from engaging in self-preferencing activities, and this may hurt Amazon's volume since it could lose sales from top products. But the etailer has been accused of copying successful products from sellers and startups and making them into AmazonBasics products with a lower price, undercutting competitors. It may have to limit its private-label business. AmazonBasics products, many of which are among the marketplace's bestsellers, have likely contributed to Amazon's success in recent years.If the congressional committee's recommendations come to fruition, Amazon may be forced to comply, which could limit further growth potential and cut sales. However, given the committee's new in-depth report, Amazon may find it harder to operate its marketplace. Amazon has mostly denied wrongdoing pertaining to product malfunctions and has managed to avoid significant legal troubles with other allegations. Following a report regarding AmazonBasics products, its private-label brand, starting fires and burning consumers, three US senators requested information from Amazon about what it's doing to ensure consumer safety.įurthermore, some Amazon employees were also found to be using third-party seller data to create competing products. The renewed scrutiny places increased emphasis on Amazon's practices and treatment of competitors. Amazon has faced regulatory scrutiny in the past, but mounting reports have pushed it even further into the congressional limelight. The committee's report also includes recommended reform policies-which have the potential to pass through legislative review-including prohibiting the use of bargaining power, implementing equal terms on equal products on its platform, and the prohibition of further merger and acquisition (M&A) activity. Amazon has since responded to the committee's report findings, denying the allegations and further stating the reputability of its marketplace and practices. The report alleges that Amazon amassed its market power by undercutting sellers and buying out key competitors, including online retailer Zappos. Amazon faces congressional scrutiny in new report.
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