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Vestager accuses Amazon of distorting market through abuse of big data

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The European Commission has taken a preliminary view that Amazon has abused its dominant position in online retail. The Commission accuses Amazon of systematically using the data of independent sellers, to benefit its own retail business, which directly competes with the third-party sellers who use their platform.

Big Data

Executive Vice President Margrethe Vestager (pictured), in charge of competition policy, said: “This is not about the insights that Amazon retail has into the sensitive business data on one particular sale, rather it is about the insights that Amazon retail accumulated through the business data of more than 800,000 active sellers in the European Union, covering more than a billion products. In other words, this is a case about big data.

“We have come to the preliminary conclusion that the use of this data allows Amazon to focus on the sale of the best selling products and marginalize third-party sellers, capping their ability to grow.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”

Amazon will be given the opportunity to respond to the Commission’s position in the next weeks. 

Asked about remedies, Vestager said that it was premature to discuss remedies and that the EU was waiting for Amazon’s responses. 

Amazon Prime

The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

Vestager said: “[Amazon’s] rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”

EU objections on Amazon's use of marketplace seller data

Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.

As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.

The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.

The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany - the biggest markets for Amazon in the EU. 

If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.

The sending of a Statement of Objections does not prejudge the outcome of an investigation.

Crime

Over 40 arrested in biggest-ever crackdown against drug ring smuggling cocaine from Brazil into Europe

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In the early hours of the morning (27 November), more than a thousand police officers with the support of Europol carried out co-ordinated raids against the members of this highly professional criminal syndicate. Some 180 house searches were executed, resulting in the arrest of 45 suspects. 

The investigation uncovered that this drug trafficking network was responsible for the annual importation of at least 45 tonnes of cocaine into the main European seaports, with profits exceeding €100 million over the course of 6 months.

This international sting, led by the Portuguese, Belgian and Brazilian authorities, was carried out simultaneously by agencies from three different continents, with coordination efforts facilitated by Europol:

  • Europe: Portuguese Judicial Police (Polícia Judiciária), Belgian Federal Judicial Police (Federale Gerechtelijke Politie, Police Judiciaire Fédérale), Spanish National Police (Policia Nacional), Dutch Police (Politie) and the Romanian Police (Poliția Română)
  • South America: Brazilian Federal Police (Policia Federal)
  • Middle East: Dubai Police Force and Dubai State Security

Results in brief 

  • 45 arrests in Brazil (38), Belgium (4), Spain (1) and Dubai (2).
  • 179 house searches.
  • Over €12m in cash seized in Portugal, €300,000 in cash seized in Belgium and over R$1m and US$169,000 in cash seized in Brazil.
  • 70 luxury vehicles seized in Brazil, Belgium and Spain and 37 aircrafts seized in Brazil.
  • 163 houses seized in Brazil worth in excess of R$132m, two houses seized in Spain worth €4m, and two apartments seized in Portugal worth €2.5m.
  • Financial assets of 10 individuals frozen in Spain.

Global co-operation 

In the framework of intelligence activities underway with its operational counterparts, Europol developed reliable intelligence concerning the international drug trafficking and money laundering activities of a Brazilian organized crime network operating in several EU countries.

The criminal syndicate had direct contact with drug cartels in Brazil and other South American source countries who were responsible for the preparation and the shipments of cocaine in maritime containers bound to major European seaports.

The scale of cocaine importation from Brazil to Europe under their control and command is massive and over 52 tonnes of cocaine were seized by law enforcement over the course of the investigation.

In April 2020, Europol brought together the involved countries who have since been working closely together to establish a joint strategy to bring down the whole network. The main targets were identified on either sides of the Atlantic Ocean.

Since then, Europol has provided continuous intelligence development and analysis to support the field investigators. During the action day, a total of 8 of its officers were deployed on-the-ground in Portugal, Belgium and Brazil to assist there the national authorities, ensuring swift analysis of new data as it was being collected during the action and adjusting the strategy as required.

Commenting on this operation, Europol’s Deputy Director Wil van Gemert said: "This operation highlights the complex structure and vast reach of Brazilian organized crime groups in Europe. The scale of the challenge faced today by police worldwide calls for a coordinated approach to tackle the drug trade across continents. The commitment of our partner countries to work via Europol underpinned the success of this operation and serves as a continued global call to action."

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coronavirus

Commission approves German scheme to compensate accommodation providers in the field of child and youth education for damages suffered due to the coronavirus outbreak

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The European Commission approved, under EU state aid rules, a German scheme to compensate accommodation providers for child and youth education for the loss of revenue caused by the coronavirus outbreak. The public support will take the form of direct grants. The scheme will compensate up to 60% of the loss of revenues incurred by eligible beneficiaries in the period between the beginning of the lockdown (which started on different dates across the regional states) and 31 July 2020 when their accommodation facilities had to be closed due to the restrictive measures implemented in Germany.

When calculating the loss of revenue, any reductions in costs resulting from income generated during the lockdown and any possible financial aid granted or actually paid out by the state (and in particular granted under scheme SA.58464) or third parties to cope with the consequences of the coronavirus outbreak will be deducted. At the central government level, facilities eligible to apply will have at their disposal a budget of up to €75 million.

However, these funds are not earmarked exclusively for this scheme. In addition, regional authorities (at Länder or local level) may also make use of this scheme from the local budgets. In any event, the scheme ensures that the same eligible costs cannot be compensated twice by different administrative levels. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve state aid measures granted by member states to compensate specific companies or specific sectors for the damages caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the German scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damages. The Commission therefore concluded that the scheme is in line with EU state aid rules.

More information on actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.59228 in the state aid register on the Commission's competition website.

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EU

Commissioner Gabriel participates in European Researchers' Night 2020

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The 15th edition of European Researchers' Night, the largest research communication and promotion event in Europe, takes place this evening (27 November). Events will be organized in 388 cities in 29 countries, giving people the chance to discover science in a fun way. They will take place physically, virtually, or in a hybrid way, in accordance with national measures in place in response to the current pandemic.

Innovation, Research, Culture, Education and Youth Commissioner Mariya Gabriel will give opening speeches at events in Sofia, Bulgaria and Perugia, Italy. Ahead of this evening's proceedings, she said: “It is fundamental to make science and research accessible to all and to show the impact of science in citizens' daily lives. This is why the European Researchers' Night is so important: it is an event open to all, even accessible from home this year. It showcases research projects and their results in an entertaining way and is a great opportunity to discover and engage with real-life researchers and experts in their respective fields.”

European Researchers' Night is funded by Marie Skłodowska-Curie Actions and in 2020, projects focus mainly on environment, sustainability and climate change.

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