Amazon has attracted the scrutiny of the European Union’s antitrust regulators yet again, this time over the way it runs its core e-commerce business.
If the EU’s preliminary investigations morph into a full-blown probe, Amazon (amzn, +1.28%) could be in a world of trouble. Here’s what you need to know.
What’s the problem?
Amazon provides a platform through which it sells products itself, while also inviting third-party merchants to sell their products.
EU Competition Commissioner Margrethe Vestager, whose picture must surely be pinned onto dartboards across Silicon Valley by this point, said Wednesday that her department has launched an initial investigation into whether Amazon is using the data it holds on third-party merchant activity to unfairly give advantage to its own e-commerce business.
This is a very early-stage investigation; it isn’t even a formal probe yet. At this point, Vestager’s team has merely sent out questionnaires to merchants that use Amazon’s platform, in order to gauge their experiences.
“The question here is about the data,” she said. “Do you then also use this data to do your own calculations, as to what is the new big thing, what is it that people want, what kind of offers do they like to receive, what makes them buy things?”
Has Amazon had run-ins with Vestager before?
This is certainly not Amazon’s first rodeo with the Danish liberal.
Last year, she forced the company to change its e-book contracts with publishers so that the publishers would no longer have to give it terms that are as good as those they offer rival e-book platforms.
Then, later in 2017, Vestager ordered Luxembourg to recover $294 million in back-taxes from Amazon, after her department found the country had effectively given the firm illegal state aid in the form of a sweetheart tax deal. To be clear, that was a…