Amazon Fined for Abusing EU Competition Rules
The European Commission breaks down the online barriers so that people can enjoy complete access to all the goods and services offered online by businesses.
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Updated November 2026. This was first published on 26 November 2020. The idea is the same. Any number below is what the original piece said then. It is not a new count.
Key takeaways
- The European Commission breaks down the online barriers so that people can enjoy complete access to all the goods and services offered online by businesses in the EU.
- The Digital Single Market Strategy ends unjustified cross-border barriers, promotes cross-border access to online content, facilitates cheaper cross-border parcel deliveries, and protects online customer rights.
- A Smartphone Displaying Amazon Logo Photo.** *Photo Credit: Christian Wiediger on Unsplash.
The EU competition rules #
The European Commission breaks down the online barriers so that people can enjoy complete access to all the goods and services offered online by businesses in the EU. The Digital Single Market Strategy ends unjustified cross-border barriers, promotes cross-border access to online content, facilitates cheaper cross-border parcel deliveries, and protects online customer rights.
A Smartphone Displaying Amazon Logo Photo.** *Photo Credit: Christian Wiediger on Unsplash.
The EU has now made it safe and easier for European consumers to shop online irrespective of where they are in the EU.
New rules to stop unjustified geo-blocking so that consumers should not face barriers such as being re-routed back to a country-specific website or having to pay with a credit or debit card only from a specific country. It allows online sellers to treat all EU consumers equally regardless of where to choose to shop from. The latest rules on cross-border parcel delivery services and the revised Payment Services Directive that are already in force. There is no cap on delivery prices. businesses will now have to disclose their prices clearly so that consumers can easily compare. Also, the National authorities will collect information each year from the parcel delivery companies, as they are subject to a universal service obligation. Moreover, the national regulatory authorities are required to assess where tariffs are unreasonably high. New Value Added Tax (VAT) rules for online sales of goods and services that will enter into force in the year 2021. Revised consumer protection rules will enter into force in 2021. It enables the removal of sites or social media accounts where scams have been identified. Also, it will be possible to request information from the internet service providers or the banks to trace the identity of rogue online traders. Further, online market places will have to inform whether the consumers are buying from a trader or a private individual, so they are aware of their rights if something goes wrong. Also, consumers searching online will be informed when a search result is being paid by a trader. The online marketplaces will have to inform about the main parameters used to determine the ranking of the results. When consumers pay for a digital service, they will get an advantage over certain information rights with 14 days to cancel the contract. Europeans can use their online subscription to sports events, films, video games, e-books, or music. The Commission is working to create a modern framework for copyright in the EU, allowing more cross-border access to online content by making the licensing for online transmissions simpler.
The EU competition rules that Amazon had broken #
The European Commission has charged Amazon, an American multinational technology company, for abusing its dominant position in e-commerce to gain an unfair advantage over its competitors. Amazon is accused of using data on the third-party sellers who use its marketplace to boost sales for its own-label goods. Also, the Commission has launched a fresh investigation into the possible favored treatment of sellers who use the logistics services of the tech giant.
Amazon has rejected the charges on it, saying no firm cares more for the small businesses.
The tech giant is facing a potential fine as high as 10% of its global turnover if found guilty of breaching the EU competition rule, which amounts to around ?15 Billion. Margrethe Vestager, Competition Commission of the EU said that it was vital that platforms with market power did not distort competition. Data on the activity of the third-party sellers should not be used to benefit Amazon when it acts as a competitor to these sellers. Amidst the booming e-commerce industry with Amazon at the peak position as an e-commerce platform, fair and undistorted access to online consumers is vital for all sellers.
The details of the investigation since July #
Following complaints from traders, the European Commission has been probing Amazon since July 2019. The tech giant accesses sensitive data such as page visits, sales figures, or shipping information from small and medium-sized companies that use its platform. Then it uses this information to help with sales of its own-label products or in choosing the suppliers. Vestager said, ‘We don’t take issue with the success of Amazon or its size.?
Amazon stated that far from being anti-competitive, its private-label products were good for customers and offered more choice. ‘We represent less than one percent of the global retail market, and there are larger retailers in every country where we operate. No company cares more about small businesses or has done more to support them over the past two decades than us.? It further pointed out that over 150,000 European businesses are selling through its online marketplace.
The charges on Amazon come as the coronavirus crisis has driven huge sales for the online retailer, as people are increasingly turning to shop online. In August 2020, Jeff Bezos becomes the richest man in the world with a fortune of over $200 billion after his firm’s share price rocketed in the early months of the pandemic.
Vestager has led her way to tighten the regulatory screw on the US tech giants, taking on both Apple and Google. Now, Europe’s Competition Supremo has Amazon in her sights, and again this case highlights the issue of platform power. Her concern is that the tech giants such as Google’s Android, Amazon’s Marketplace, or Apple’s iOS operating system, can have great power over the businesses that are dependent on it.
Vestager also focuses on its access to huge amounts of data, including which products from the third-party sellers on its Marketplace are selling well. She says that Amazon is a highly automated company, wherein the business decisions are based on the algorithmic tools that are used by the company to compete unfairly against its own business customers.
Amazon claims that it makes more money from third-party sellers than its own-label products. Also, there are questions about whether there is any real harm to consumers. But, don’t expect this to be the only investigation into the might Amazon, a Biden administration in the US, looks eager to follow Europe’s lead in tackling the giant platform’s power.
What does it mean for other tech giants? #
Vestager has taken a tough stance on the US tech firms. seems as they are having their grip on the digital landscape. For instance, search engine Google has been fined over ?8 billion in three separate cases, all related to alleged abuses of power in the EU. Meanwhile, the latest report backed by the Democratic lawmakers in the US has advised changes that could lead to the break-up of a few giant tech companies, including Facebook, Amazon, and Google.
The report found that Amazon possessed significant and durable market power in online shopping that it furthered in part by its anti-competitive conduct in its treatment of the third-party sellers.
In October 2020, Amazon posted a blog on its website mentioning the fact on third-parties as they have the opportunity to sell alongside a retailer’s product is the very competition benefitting the most to the consumers. And that has made the marketplace model quite successful for the third-party sellers.
Questions and answers #
What is the main point? #
The European Commission breaks down the online barriers so that people can enjoy complete access to all the goods and services offered online by businesses in the EU.
What else did the original piece say? #
The Digital Single Market Strategy ends unjustified cross-border barriers, promotes cross-border access to online content, facilitates cheaper cross-border parcel deliveries, and protects online customer rights.