During this year’s 48-hour Prime Day sale event, Amazon (AMZN) moved over 175 million units of products, beating any two-day period in the company’s history. But just one day after the massively successful shopping festival wrapped up, the e-commerce giant was hit by an antitrust probe in Europe that could result in a fine big enough to erase an entire year of earnings.
On Wednesday, the European Commission announced a formal investigation into Amazon over its use of third-party seller data. The European Union’s executive body said Amazon’s use of this data could violate the EU’s competition rules, the equivalent of antitrust law in the U.S.
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“Amazon appears to use competitively sensitive information—about marketplace sellers, their products and transactions on the marketplace,” the European Commission said in a statement released this week. “The Commission will focus on whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects competition.”
Specifically, the Commission will examine Amazon’s dual role as an online retailer and a platform for merchants, said the EU’s Commissioner for Competition Margrethe Vestager. By the EU’s logic, Amazon may be exploiting third-party sellers’ information to benefit itself as these sellers’ competitor, rather than a facilitator, as well as hurting other retailers in the European market.
“We need to ensure that large online platforms don’t eliminate these benefits through anticompetitive behavior,” Vestager said in a statement on Wednesday. “I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”
If Amazon is found to have broken the competition law, it could face a fine up to $23 billion, or 10 percent of its 2018 revenue. In 2018, Amazon reported $232 billion in gross revenue but only $10 billion in profit.
