Is Amazon Unfairly Copying Products? EU Quizzes Merchants
Is Amazon Unfairly Copying Products? EU Quizzes Merchants
By Natalia Drozdiak, Aoife White & Spencer Soper September
27 2018, 10:58 AM
(Bloomberg) -- European Union antitrust regulators are
asking whether Amazon.com Inc. unfairly copies popular products sold by rivals
on its online marketplace, according to a questionnaire sent to merchants.
In a 16-page form to be filled out by Oct. 9, regulators
want to know whether Amazon has in recent years started to sell products under
its own brand that are "identical or very similar" to ones merchants
have offered on the company’s website and what impact that’s had on their
business.
EU Competition Commissioner Margrethe Vestager last week
said her department had opened a preliminary investigation into Amazon to check
how the Seattle-based company gathers information on sales made by competitors
on the Amazon Marketplace and whether that gives it an unfair edge when it
sells to customers.
Speaking at an event in Washington on Friday, Vestager
said that while "there are no accusations against Amazon at this
point," she and her team have concerns about the company’s practices. She
said people are asking: "is this a level playing field when they both can
access all our data but they also can sell the products that we sell
ourselves?"
The Commission and Amazon declined to comment on the
details of the questionnaire.
Internet giants’ control of data is an increasing focus
for regulators who are uncertain whether companies might breach antitrust when
they harvest more and more information on how consumers behave online. The
European Commission said it began the preliminary probe in large part because
of responses it received during a broader e-commerce sector investigation
concluded last year.
The EU in its questionnaire asked merchants to provide
hard evidence such as correspondence with Amazon, and the exact date when
Amazon began selling any rival product under its own brand. The EU also wants
to know whether merchants use data-sharing tools, for instance for sales
optimization, that may be provided by Amazon.
The questionnaire also asks how Amazon’s practices have
affected merchants’ business and whether their products saw fewer or no sales
after the e-commerce giant entered their market or whether the companies had to
lower or raise prices as a result of the new competition.
A 2016 Bloomberg story depicted how Amazon is using
insights gleaned from its vast web store to build a private-label juggernaut
that includes thousands of products -- from electronics accessories, to
kitchenware, bedding and more.
The company now has more than 120 private-label brands,
according to TJI Research. Some, like Amazon Basics, are clearly identified as
Amazon products. Others, like its clothing and furniture lines, are less
obviously from the company. This explosive growth has intensified concerns of
merchants who see Amazon gaining unfair advantage to compete with them.
Amazon has access to voluminous data on which shoppers
purchased or browsed particular products that are similar to its own
private-label brands, so it can direct its marketing to those shoppers and
spend less than competitors to get customers, said James Thomson, a former
Amazon executive who now advises merchants how to sell on the marketplace.
"Amazon forces you to give them your data and then
uses it to compete against you," he said. "You can run the
marketplace platform or you can be a seller, but you shouldn’t be able to do
both."
Even though the probe could be the first steps in a
process that leads to fines, Amazon shares have risen 3.7 percent since
Vestager’s announcement, with a current market value of $982 billion.
©2018 Bloomberg L.P.
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