EU charges Amazon with breaking competition law

The European Commission charged Amazon with breaking antitrust rules on Tuesday, in a major blow to the US retail giant.

After launching an investigation into the company in July, the EU released its initial results of the probe on Tuesday, saying it alerted Amazon of its findings.

Read more: EU calls for greater regulation of US tech companies

What is Amazon accused of doing? 

• The charges focus on Amazon's online marketplace, where the company sells goods directly but also hosts smaller merchants who also sell products.
• Amazon is accused of using data from those independent sellers to assess shopping patterns and the latest trends.
• Thus use of data gives Amazon an unfair advantage and distorts competition, the EU probe found.
• A second investigation has now also been launched into the company's Amazon Prime service — specifically the "Buy Box" that appears and directs consumers to merchants using Amazon's own logistics service.

Amazon 'marginalizes third-party sellers'

Margrethe Vestager, the European Commission vice president responsible for antitrust issues, said an initial probe into the company's practices uncovered violations in Germany and France.

Amazon "may have used sensitive data [on a] big scale to compete against smaller retailers," she wrote on Twitter, adding that it was now up to the company to respond.

Vestager also said the company's strategy "marginalizes third-party sellers."

"We must ensure that dual role platforms with market power, such as Amazon, do not distort competition."

EU regulators vs big tech

EU antitrust regulators have been scrutinizing some of the biggest names in Silicon Valley, with some investigations resulting in record fines.

The bloc launched its first investigation against Google in 2010, with the company facing over €8.2 billion ($9.7 billion) in fines that resulted from three separate cases. In 2018, Google was handed a record €4.34 billion fine for using its Android mobile operating system to block rivals. The company is contesting the penalties.

Apple is also being investigated by EU regulators over the company's App Store and mobile payment system Apple Pay. The company is also at the center of the EU's efforts to make US tech companies pay more taxes.

Facebook has also come under scrutiny by EU regulators over the way the social media giant collects and monetizes its data. 

rs/msh (AP, AFP, Reuters, dpa)