Is Amazon violating Europe’s anti-trust laws? Probably!
The internet’s biggest retailer is under investigation.
Last week, the governing body of the European Union, announced that it was investigating whether Amazon’s use of its internal data to create and market its own brands was in violation of European anti-trust laws.
More or less, Amazon collects and analyzes data on an unfathomable number of consumer patterns in order to figure out what stuff people want to buy on their website. The company then makes that stuff, usually by directly partnering with manufacturers and cutting out the middleman, and offers it under one of its countless private-label brands. After that, Amazon uses even more data to figure out exactly who is looking to buy that stuff on Amazon and uses its search engine to show it to those potential customers at a cheaper price than the competition.
This is much more terrifying than it is convenient, and it’s practices like these that led the legal blog The Fashion Law to refer to Amazon in one headline as “an anti-trust lawsuit waiting to happen.”
In an influential 2017 Yale Law Journal article, the lawyer Lina M. Khan explained that even though retailers have been creating their own private-label knockoffs of popular products for years, “The difference with Amazon is the scale and sophistication of data it collects.” She continued, “Amazon tracks what shoppers are searching for but cannot find, as well as which products they repeatedly return to, what they keep in their shopping basket, and what their mouse hovers over on the screen.” In her piece, Khan criticized “the current antitrust regime” in America for “[having] yet to reckon with the fact that firms with concentrated control over data can systematically tilt a market in their favor.”
In a press conference, the European Union’s Competition Commissioner Margrethe Vestager described the investigation as being in its “very early days” and said that the Commission was currently gathering information from third-party merchants related to their experiences on the platform. However, this is not the first time that the EU, which generally places tighter restrictions on internet companies than America does, has gone after Big Tech. Earlier this year, the EU hit Google’s parent company Alphabet with a $5 billion fine for forcing developers who relied on its Android operating system to also incorporate its proprietary search engine as well as its Chrome web browser. It seems better for governments, whether local or multinational, to enact checks on the power of companies like Google and Amazon rather than, oh, I don’t know, making insane concessions to win the right to host their new headquarters? Just a thought.