American Tech giant, Amazon, is now under the scrutiny of the European Union Competition Commission for allegedly violating Anti-trust laws. Last week, the governing body announced that it will commence the investigation into the matter pertaining to storage and use of internal data by the tech giant and whether it is in violation with European Anti-Trust Law.
To be in a dominant position is not in itself illegal but it has been alleged that Amazon tracks down the pattern and buying habits of its customers in order to manufacture that same product, by collaborating directly with the manufactures and thereby, cutting the middlemen. It has also been accused of directing that specific product to the customer that has searched for it, at a lower price than anyone in the marketplace.
According to the official website of the European Commission, Article 102 of the Treaty prohibits firms that hold a dominant position on a given market to abuse that position, for example by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers. Examples of behavior that may amount to an abuse include setting prices at a loss-making level, which is what Amazon has been accused of doing.
According to thefashionlaw.com, the American e-commerce giant uses its powerful platform to bolster its private-label business, whether it be apparel and accessories or batteries and home goods.
In a Yale Law Journal article, lawyer Lina M. Khan states that the sophistication with which Amazon collects the data of its users is monopolistic and exclusionary. Calling Amazon a titan of the twenty-first century, Ms. Khan states that one cannot cognize the potential harms to competition posed by Amazon’s dominance if competition is to measured primarily through price and output.
In a press conference, the European Union’s Competition Commissioner Margrethe Vestager described the investigation as being in its “very early days” and said that the Commission was currently gathering information from third-party merchants related to their experiences on the platform.
This is not the first time any major tech player has come under scrutiny. This year, Google was hit with a €4.34 billion fine by the EU for illegally abusing the dominance of its Android operating system.