Thursday, 20 September 2018 09:45

EU taking 'close look' at Amazon's business practices Featured

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Margrethe Vestager addressing Wednesday's media conference in Luxembourg. Margrethe Vestager addressing Wednesday's media conference in Luxembourg. Courtesy: European Union

The European Union has started taking a close look at the business practices of American retail giant Amazon, the bloc's competition commissioner, Margrethe Vestager, told a news conference in Luxembourg on Wednesday.

Vestager was at pains to emphasise that the investigation was only in the information gathering stage. "The question that people have been asking increasingly and we've also seen it ourselves in the market is you have these platforms that have sort of dual purpose," she said.

"They are both hosting a lot of merchants to enable, maybe, the smaller guy to have his business to be found, to do his commerce. and at the same time, they themselves are merchants, big merchants. So they are both hosts and they do the merchant business themselves."

Vestager's comments come a few days after an analyst from Citi Research suggested that it might be a good idea for Amazon to separate its e-commerce business from its cloud arm to avoid regulatory pressure.

The EU competition commission has a fearsome reputation, having driven investigations that have resulted in massive fines being levied on Apple — for allegedly not paying its fair share of taxes in Ireland — and Google, for both alleged anti-trust issues with its Android mobile operating system and its search business.

Vestager told Wednesday's media conference: "And the question here is, about the data. Because if you as Amazon get the data from the smaller merchants that you host, which can be, of course, completely legitimate, because you can improve your service to these smaller merchants... well, do you then also use this data to do your own calculations as to what is the next big thing?

"What is it that people want? What kind of offers do they like to receive? What makes them buy things?"

She said it was considerations such as these that had led the EU to start gathering information about Amazon.

"...it is very early days in this anti-trust investigation into Amazon's business practices. We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full," Vestager said.

"As I said, these are very early days. We have no conclusions, we haven't formally opened the case, but we are trying to make sure that we sort of get the full picture because we saw it on our own... and this is also what a lot of people are talking about. So we will do the follow-up."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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