Amazon Settles EU Antitrust Case—But Here’s Why It Won’t Pay Any Fines

Topline

Amazon has agreed to a settlement that will resolve two antitrust cases against the retail giant in the European Union, while avoiding a multibillion dollar fine over allegations the company was improperly using data from third-party sellers who use Amazon’s marketplace.

Key Facts

Amazon has pledged to stop using non-public data from independent sellers’ use of the platform’s marketplace to support Amazon’s own retail business, and to not use that data to help sell Amazon-branded goods and other private-label products, the European Commission said Tuesday.

The company will also commit to allowing third-party sellers on Amazon an equal opportunity to be selected as customer’s default option for the platform’s “Buy Box,”—the sidebar on Amazon products’ pages that encourages customers to add items to their carts—and to qualify for the Prime shipping service for seven years.

The tech giant proposed making the concessions over the summer to avoid paying a fine.

Amazon’s fine could have been as high as 10% of the company’s global annual revenues, which for Amazon last year could have been as much as $47 billion, a record fine for an antitrust violation.

However, the European Commission noted that if Amazon breaches the deal, the bloc could impose a fine of up to 10% of annual turnover or 5% of daily turnover per day for every day of noncompliance.

Contra

Amazon said it disagrees with “several” of the European Commission’s preliminary conclusions, but added the company worked with the bloc to continue to service its European customer base, an Amazon spokesperson told CNBC.

Key Background

Last month, the European Commission announced it was concerned about Amazon “systemically replying on” the private business data of independent sellers who use the platform’s marketplace to benefit Amazon’s retail business, which the commission said directly competes with those third-party sellers. The European Commission also said it launched a second formal antitrust investigation into allegations Amazon offered preferential treatment to marketplace sellers that used the platform’s logististics and delivery services.

Tangent

Europe is home to some of the world’s most stringent regulation and antitrust measures for tech companies. On Monday, the EU charged Facebook parent company Meta with antitrust violaltions for closely aligning Facebook’s social media platform with Facebook Marketplace. “This means Facebook users have no choice but to have access to Facebook Marketplace,” competition chief Margrethe Vestager said. Google and Apple are also under investigation for potentially violating EU antitrust laws. This week, officials said Elon Musk’s new Twitter policies may also violate EU digital rules.

Further Reading

Google Faces Record $4 Billion Fine In Europe After Losing Android Antitrust Appeal (Forbes)

Amazon Charged With EU Antitrust Violation For Allegedly Using Sellers’ Data To Compete Against Them (Forbes)