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Austria opens Amazon antitrust probe over sellers discrimination

By Sasha Fedorenko February 15, 2019 - 2:28 pm

The Austrian Federal Competition Authority (BWB) has launched an Amazon antitrust probe over alleged abuse of their dominant position in the country to discriminate against sellers on their marketplace.

The investigation aims to examine Amazon’s ‘dual role’ as a retailer and marketplace platform for allegedly violating competition law.

The BWB said to receive complaints from “a high double-digit number” of stores via Austrian trade association of retailers, in December. Complaints say that Amazon discriminates against other merchants in an attempt to boost their own products on the marketplace. Reported abuses include terminating merchants’ accounts, forcing them to disclose sale prices, sellers losing their product ranking as well as adding Amazon adding incorrect delivery details to seller accounts.

The digital world is not a legal vacuum. Companies operating on a global scale must adhere to applicable Austrian laws and regulations. The outcome might be commitments, an application for a fine or an application for termination of infringements to the Cartel Court.”
–  Theodor Thanner, director general and head, BWB 

Amazon could face new obligations or a fine if found guilty. The BWB will work with German antitrust authority, which opened a similar investigation in November 2018. They plan to launch a market survey as part of the probe.

Handelsverband retail association says that Amazon’s own revenue in Austria was about €690m (£606m) in 2017. Austria merchants sell on the marketplace around €700m (£614m) worth of goods.

European Competition Commissioner, Margrethe Vestager the significant amounts of data that Amazon has on their sellers. She questioned whether the marketplace abuses the data or uses it to improve merchants’ trading on Amazon.

You have these platforms that have a dual purpose; they are both hosting a lot of merchants to maybe enable a smaller guy to allow his business to be found and do his commerce. At the same time, they are merchants themselves – big merchants. The question here is about the data. If you as Amazon get the data from the smaller merchants that you host, which could, of course, be completely legitimate because you can improve your service for these smaller merchants. Do you then use this data to do your own calculations into what is the next big thing, what is it people want, what kind of offers do they like to receive, what makes them buy things.”
– Margrethe Vestager, European competition commissioner

Tamebay contacted Amazon on the issue. Here is what they said:

Please understand that we do not comment on ongoing proceedings. However, we will cooperate fully with the Austrian competition authority and continue working hard to support small and medium-sized businesses and help them grow. And here is additional content regarding the seller business in general. Amazon succeeds when sellers succeed. Sellers delight our customers every day with a vast selection, convenient delivery, and great prices, make up 58% of paid units sold in our store, and in the EU are growing twice as fast as Amazon’s own sales. Nearly 200,000 entrepreneurs worldwide surpassed $100,000 of sales in our stores in 2018, and we estimate these sellers have created over 900,000 new jobs. We spend billions of dollars each year to help sellers succeed in our store, driving traffic, operating the servers and infrastructure that keep our online store open at all times, and combatting fraud and abuse. Our biggest single capital expenditure is our fulfilment and distribution network, which directly benefits sellers, who now have as many units in that network as Amazon itself. Our investments allow sellers to focus on their products while reaching customers throughout the world, levelling the playing field and lowering entry barriers.
Amazon

  • Cambridge_Blue
    3 months ago

    Can somebody wake up the UK Competition Authorities please?

  • Jay
    3 months ago

    And slowly it begins… legislation for marketplaces as the unfair treatment of sellers begins to gather momentum.

    Been calling for this for years. It should be national news but you don’t know even 1% of what it can be like until you try and run a business on either eBay or Amazon. Amazon are worse imho, vastly more unreasonable than eBay, but both have lots of areas that could be improved. Some of the policies are just draconian!

    They both should be heavily regulated, no different to how energy companies used to take the p*** out of consumers years ago.

    If Amazon was a county it’d be North Korea.

    • 3 months ago

      If Amazon was a county it’d be North Korea! Lol Well described mate!

  • jim
    3 months ago

    careful what you wish for
    online markrt places are in the sights of brussels
    that means not just the companies
    tax and regulation will only increase

    • Jay
      3 months ago

      @Jim,

      Have you ever had your business jeopardised or threatened with account suspension, restriction (whether temporary or permanent) or a policy infraction which limits your businesses sales or viability almost overnight?

      This is despite the fact that your business may rely almost entirely on its income from the sales generated from the marketplace and which the staff you employ also rely on this same income to ensure their wages are paid on-time each month.

      Marketplaces seem to fail to realise the weight of the cards they hold. Having built an e-commerce system on which the best part of 50% of UK small business now rely, why is it that this “power” and “influence” is not recognised by legislation? Potentially the decisions and policies imposed on small businesses actively trading on marketplaces has the ability to affect the every day lives of ordinary people, most of whom consider their employment as “secure” little in the knowledge that at any moment their employer could be faced with an account suspension resulting in an almost certain loss of what was yesterday thought to be a “secure” job.

      We employ staff (and lots of them), their wages are reliant almost entirely on the sales generated through marketplaces such as eBay and Amazon.

      We know we’re not the only business faced with these same concerns on an almost daily basis. We want legislators to bring security for our employees by making marketplaces accountable for their actions. No longer should they be able to suspend accounts when matters which are almost entirely out of your control are determining the factors deciding whether or not you should be allowed to trade or not.

      The entire principle of having your “selling privileges” remoked at any moment is just reminiscent of ancient draconian law. See it how like, it’s nothing more than a dictatorship in modern times.

    • 3 months ago

      @Jay Whilst I agree with your points, Jim has a point, what you “win” with one hand can easily be taken by other actions like increased taxation etc

      “We employ staff (and lots of them), their wages are reliant almost entirely on the sales generated through marketplaces such as eBay and Amazon. ”

      Your employees wages are not reliant on eBay / Amazon sales, they are reliant on YOU.

      Maybe you should not have all your eggs in one basket, start to build a business on your own with your own website / customers etc, many businesses do that and don’t have to rely on Amazon / eBay, some don’t even sell on them.

  • Jay
    3 months ago

    As sellers, surely we all atleast agree that terming it as a “privilege” to sell on eBay and Amazon is just manipulation by power of position?

    It’s only a “privilege” because they know how much sellers DO rely on them and have very little options in terms of other marketplaces or quick scale through their own websites.

    We’d love to promote our website to the hundreds of thousands of customers that we serve on eBay and Amazon every year, but as we know, it’s against the terms and conditions of these websites to do so. The risk is therefore too high when the penalty for doing so is permanent suspension.

    Marketplaces coin these customers as “their” customers and not “ours”, but is that “really” right?

    A store in a shopping centre will pay excessive rates to be there because they know that’s where the footfall is. I see it as being no different to selling on eBay and Amazon, we too pay “excessive” rates to sell on marketplaces which are nothing but digital shopping centres. But is right or even fair that marketplaces impose rules preventing you from marketing to your own customers?

    • 3 months ago

      I don’t see it as a “privilege” to sell on any marketplace, but nor is it a right. When I sign up I agree to the terms and conditions and should not really complain after.

      There is no reason that they should not act fairly to sellers, but if they do not and we are not happy, we are free to go our own way.

      No it is not right that any marketplace stop you from marketing direct to a customer you have got through their site, as you rightly say, it is no different from a shop in a shopping centre or a newspaper you may advertise in, stopping you from marketing to customers. But as always, they make the rules for their site and that is what we all agree to when we sign up.

      Should you get a permanent suspension, from a marketplace, then there is nothing stopping you from marketing to those customers, much the same as if you leave voluntarily.

  • 3 months ago

    There are probably many ways in which the law in the UK (at least) has intervened in pursuit of ‘fairness’ where one party has had all (or almost all) of the power in a relationship. Obvious example are in employment law or in abuse of commercial monopolies. So, it is not unusual for governments (including the EU) to take action. So, it is insufficent to say that it’s a private contractual agreement and the government can do nothing. In fact, I believe, that is the only way you can get Amazon and others to be more ‘fair’.

    I must say however, that over the last 12 years, I have grown a business on Amazon from virtually nothing to nearly a €1 million last year. Without the existance of Amazon (and particularly FBA) I could not have done it. Amazon can be a complete pain in the backside sometimes but certainly, if I look at my overall picture, I have to accept that.

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