Antitrust

S H E A R M A N & S T E R L I N G L L P | 9 3 for abusing its dominance in the German online retail market by imposing unfair terms and conditions on third-party sellers on its Marketplace. 7 These third- party sellers include "tens of thousands" of small and medium-sized enterprises that Amazon directly competes with when it sells its own-brand products. 8 The terms and conditions, which the third- party sellers must accept in order to be able to sell on the Marketplace, govern the rules in which they can advertise and sell on the Marketplace and they may disadvantage the sellers' ability to compete with Amazon. The BKartA's investigations appear to have had a domino effect. In 2019, the BwB in Austria, the AGCM in Italy and the Conseil de la Concurrence (CC) in Luxembourg all launched probes into whether Amazon's Marketplace platform has abused its market dominance by discriminating against third-party sellers and favoring its own products. 9 Whilst the AGCM's investigation focuses on whether Amazon's terms and conditions provide an unfair advantage to third-party sellers who use Amazon's own logistics services, the CC follows the EC's lead in also covering Amazon's collection of data in order to (allegedly) gain a competitive advantage. These investigations are still at preliminary stages and are yet to reach any conclusions as to whether Amazon infringed any domestic competition laws. THE EC INVESTIGATES AMAZON MARKETPLACE'S USE OF DATA In September 2018, the EC commenced preliminary investigations (by, for example, sending questionnaires to third-party sellers) into Amazon's dual role on its Marketplace platform and how Amazon uses data generated from transactions on its platform. 10 Unusually, the EC's investigation was not prompted by a complaint from a competitor but from the EC's own market observations and its 2017 e-commerce sector inquiry. More specifically, the EC is examining whether such data collection practices may provide Amazon with a unique competitive advantage by offering insights into how it can successfully develop and market its own products to customers. The EC may also be investigating a novel form of data- based leveraging in that, by collecting such data, Amazon is capitalizing on its pre-eminent market position in the online intermediary retail market in order to bolster its market position on the upstream retail market by developing consumer products itself. Another theory of harm that the EC may be formulating is whether sellers are afforded equal access to potentially competitively sensitive information regarding rival Marketplace sellers such as prices, sales numbers and customer search information. Even if third-party sellers are allowed equal access, this may lead to other competition law issues such as the risk of sellers using Amazon's Marketplace as a hub-and- spoke platform for price-fixing among themselves. 11 Amazon could, in principle, still be liable for any such infringement of competition law if it was shown to have facilitated and to have been reasonably aware of the collusion. U N U S U A L LY, T H E E C ' S I N V E S T I G A T I O N W A S N O T P R O M P T E D B Y A C O M P L A I N T F R O M A C O M P E T I T O R B U T F R O M T H E E C ' S O W N M A R K E T O B S E R V A T I O N S A N D I T S 2 0 1 7 E - C O M M E R C E S E C T O R I N Q U I R Y 1. Germany threatens curbs on Facebook's data use, The Financial Times (January 25, 2018). 2. Bundeskartellamt, Bundeskartellamt Prohibits Facebook from Combining User Data from Different Sources (February 7, 2019), https://www. bundeskartellamt.de/SharedDocs/Publikation/ EN/Pressemitteilungen/2019/07_02_2019_ Facebook.html. 3. See here: https://www.bundeskartellamt.de/ SharedDocs/Entscheidung/EN/Fallberichte/ Missbrauchsaufsicht/2019/B6-22-16.pdf?__ blob=publicationFile&v=3 (page 12). 4. Bundeskartellamt initiates abuse proceeding against Amazon, Bundeskartellamt (November 28, 2018), available here: https://www. bundeskartellamt.de/SharedDocs/Meldung/ EN/Pressemitteilungen/2018/29_11_2018_ Verfahrenseinleitung_Amazon.html. 5. Austrian Federal Competition Authority initiates investigation proceedings against Amazon, BWB (February 14, 2019), available here: https://www. bwb.gv.at/en/news/detail/news/austrian_federal_ competition_authority_initiates_investigation_ proceedings_against_amazon/. 6. Amazon: investigation launched on possible abuse of a dominant position in online marketplaces and logistic services, AGCM (April 16, 2019), available here: https://en.agcm. it/en/media/press-releases/2019/4/Amazon- investigation-launched-on-possible-abuse-of-a- dominant-position-in-online-marketplaces-and- logistic-services. 7. See n. 4. 8. German cartel office launches investigation into Amazon marketplace, The Financial Times (November 29, 2018). 9. See n. 5, 6 and Amazon faces Luxembourgish antitrust probe, PaRR (April 3, 2019), available here: https://app.parr-global.com/intelligence/ view/prime-2813761. 10. See Q&A on Amazon from the Press conference by Margrethe Vestager on Luxembourg McDonalds' State aid case (September 19, 2018), available here: http://ec.europa.eu/avservices/ video/player.cfm?sitelang=en&ref=I160574. 11. The Decision of the CMA, Case 50223, Online sales of posters and frames, Trod Limited and GB eye Limited (2016), found that two U.K. sellers agreed to fix the prices of the posters and frames sold on Amazon Marketplace. There was no indication in this decision that Amazon provided the sellers with non-public competitively sensitive information or that Amazon facilitated the infringement of U.K. competition law. CONTINUED >

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