EU launches antitrust investigation against US tech giant Amazon

At present, the European Union is continuing to increase its supervision of large technology companies. Following Google’s “high price” ticket, the European Union recently launched a new round of offensive against the US technology giants on the grounds of Amazon’s antitrust investigation. On November 10, local time, the European Union formally sued the US e-commerce giant Amazon for disrupting retail market competition, claiming that the company used its scale, strength and data to obtain an unfair competitive advantage in online platform sales, and determined that Amazon violated EU antitrust law.In fact, in recent years, the EU has been considering introducing new regulations to restrict the market power of large technology companies and strengthen market competition. Next month, the “Digital Services Act” (DSA) will be released, which will have a greater impact on American technology giants. The international trade rivalry between the European Union and the United States, a pair of old allies in the digital economy era, will also intensify.

EU officially sues Amazon

The investigation focuses on its “dual identity”

In recent years, EU antitrust investigations against US technology giants are not uncommon. The EU Competition Commissioner Vestagel, who announced the prosecution of Amazon, has led several antitrust wars with technology companies. Under her authorization, the European Union issued more than 8 billion euros of “sky” fines against Google in three independent antitrust cases, and Apple was also ordered to pay 13 billion euros in taxes to the Irish government.
The antitrust investigation against Amazon will focus on determining whether its “dual identity” violates EU antitrust laws. Amazon’s “dual identity” is that the company is both a trading platform for third-party suppliers, and its self-operated stores are also competitors of these suppliers. European Union regulators worry that under this advantage, Amazon may abuse its role, use collected merchant data, and compete with it. To this end, the European Commission has launched an investigation since last year on how Amazon collects data on competitors who sell products on its platform.
The European Commission’s investigation found that Amazon’s data processing system can collect and aggregate a large amount of seller data, such as the number of orders, seller income, and clicks on seller offers. By analyzing these data, Amazon’s self-operated business can “follow and sell” the best-selling platform. Commodities, or optimize commodity pricing based on seller data. As a result, the European Commission determined that Amazon used seller data to circumvent normal market competition risks and consolidate its position as the “largest online sales platform” in France, Germany and other countries. This action has violated the EU’s antitrust laws. Vestagel bluntly stated at the press conference that Amazon has “distorted competition in the online retail market”, and she explained that “using this data allows Amazon to focus on selling the best-selling products, thereby marginalizing third-party sellers. Limit their ability to grow.” In addition, Vestagel said that the EU will also investigate in depth whether Amazon favors its own business or sellers who use Amazon logistics on the platform.
After the EU press conference, Amazon immediately expressed its opposition to the EU’s allegations, saying that it will continue to cooperate with the European Commission so that it can accurately understand the company’s related processes. According to the process, the EU may not make a ruling on this matter until next year. However, Amazon’s stock price has been affected. As of the close on the 10th local time, Amazon’s stock price fell 3.46%. This is mainly because the market is concerned that the EU’s antitrust investigation will increase the risk of Amazon being fined or ordered to change business behavior. It is worth noting that if Amazon’s violation of EU competition rules is confirmed, the company will face a fine of up to 10% of its annual global sales. Amazon’s revenue in 2019 is approximately 237.2 billion euros.

EU “Digital Services Act” announced next month

American technology giants face challenges in their business models

In recent years, the European Commission has launched investigations into companies such as Google, Apple and Amazon, fearing that the dominance of technology giants hinders market competition. However, compared to the new EU regulations, the “Digital Services Act” that will be introduced in December, antitrust investigations against independent companies are just a “pre-dish” in the EU regulatory feast.
The new EU regulations, the Digital Services Act, which will be introduced in December, are quite revolutionary and will be the EU’s first comprehensive reform of its Internet rules in the past 20 years. The European Union hopes to use the bill to curb the unfair competition and tax avoidance of large US technology companies in Europe, and at the same time improve Europe’s competitiveness in the field of digital technology. According to the drafting “Digital Services Act” disclosed by the European media, if the market dominance of technology giants is deemed to threaten the interests of customers and smaller competitors, they will be forced to split or sell some European businesses. This will ensure that large companies that dominate the market cannot use their scale to crowd out smaller competitors. In addition, the bill also makes new provisions on the responsibilities and obligations of online social media platforms in handling illegal content and false information. It will also strengthen the authority of relevant agencies to review the regulatory powers of user information collection of technology companies; online platforms delete content or product listings. Decisions must also be transparent to ensure that legitimate products and services are not accidentally deleted.
In fact, increasing the supervision of large-scale technology companies has become a global consensus in recent years, and the United States has also launched many investigations into technology giants. However, although the United States has also conducted antitrust investigations, the main point of departure is to protect the competitiveness of the domestic market and protect the interests of American consumers. The United States has always opposed the regulation of US technology companies and the collection of “digital taxes” by other countries and regions. In June of this year, the United States unilaterally announced its withdrawal from the digital tax agreement with 136 countries and regions including France, and at the same time launched an investigation into the European Union’s digital tax, with the aim of threatening many European countries to stop collecting digital taxes on US companies. In view of the previous performance of the United States, analysts said that if the European Union again “surges” against US technology companies at the regulatory level this time, it may further aggravate trade frictions between the United States and the European Union.
Gonzalez, CEO of the Geneva International Trade Center, said that trade disputes between Europe and the United States may intensify and have a negative impact on the global economy. “Trade uncertainty is dragging down the economy.” He said, “It blocked the global economic artery and affects every country.” Gonzalez criticized the US government without naming names, believing that it imposes the logic of “dominance by the strong” on global trade. system. “We don’t need strong islands to plunge the rest of the world into a sea of ​​extreme poverty, but we need a strong world that can hold up every corner of the world.”

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