The EU Is Investigating Amazon's Business Practices

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The European Union has announced that it is probing Amazon, to see if it does violate its anti-competitive business practices on the continent.

Tech companies have been a big target by the EU in the past decade, with Google and Facebook both getting record fines in recent months. Now it looks like Amazon is going to be next in line to get a record fine.

This investigation is going to put Amazon's data collection under the microscope. For years, it has been said that Amazon is using that data from its merchants in an effort to get a competitive advantage against the very merchant that is selling products on Amazon's platform. It's easy to see why Amazon would want to do this. It wants its merchants to sell on their platform versus on their own website, then Amazon gets a cut of that revenue.

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Amazon has a "dual role" in the retail space right now, as a retailer and as a marketplace. So the investigation is going to be looking into that, and seeing if that is killing competition.

The EU did put out a statement and stated that "based on the Commission's preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace."

It's the European Commission that is investigating Amazon this time. That's the executive arm of the European Union or the EU. It actually began questioning merchants about how Amazon collects its data, last year. If the Commission does find that Amazon breached its rules, it could face a fine of up to 10-percent of the company's global annual revenues. And given how much Amazon makes in a year, that could be a pretty hefty fine.

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As Amazon continues to grow, it is facing more and more scrutiny around the world. The European Union is still one of the very few antitrust regulators in the world that is actually investigating big tech companies like Amazon, to see if they are following the rules. This is something that President Trump has been critical of, as he thinks that the FTC and DOJ should be investigating these companies too.

2020 Presidential Candidates have also been very critical of big tech and have been lobbying to break them up. Specifically speaking of Amazon, Apple, Facebook and Google. These companies have gotten so large, that they are their own competitors in a lot of spaces. Amazon is a good example. Not only are they a retailer, but they are also a marketplace platform where people can sell products. Which, in a way, is a competitor to Amazon's main business. Then there's also the fact that there's AWS, Amazon's cloud business, as well as their Music and video business too.

The European Union investigation was announced before the market opened this morning, and Amazon has been trading pretty flat, to trading the same as the overall market today. So it looks like these investigations are priced in. Not surprising, seeing as the US is investigating Amazon, Apple, Facebook and Google right now.

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