European Regulators Target Amazon’s Marketplace Practices

Amazon could soon find itself under the scrutiny of Europe’s antitrust regulators as an investigation is likely to be launched next year into whether the retail giant unfairly favors its own branded products on its online marketplace. The potential probe is being developed under the EU’s landmark Digital Markets Act (DMA), which aims to curb the dominance of Big Tech, according to Reuters.

If Amazon is found in violation of the DMA, the company could face a penalty of up to 10% of its global annual revenue. The decision on whether to proceed with the investigation will be made by incoming EU antitrust chief Teresa Ribera, who is slated to assume the role next month. Ribera, a Spanish official, will replace Margrethe Vestager, the outgoing commissioner who has spearheaded several high-profile antitrust cases during her tenure.

Amazon’s Stance on DMA Compliance

Amazon has maintained that it complies with the requirements of the DMA and has been cooperative with the European Commission since two of its services were designated as key “gateways” connecting businesses and consumers. The DMA, which took effect last year, prohibits major tech platforms from giving preferential treatment to their own products or services, among other obligations.

Related: Amazon Faces Legal Setback in Antitrust Lawsuit Over Pricing Practices

In a compliance report published in March, Amazon stated that its ranking models do not differentiate based on whether products are sold by Amazon itself or by third-party sellers. The report also noted that the company does not provide preferential treatment to its in-house brands.

The European Commission had earlier announced in March that it was collecting data on Amazon’s handling of its private-label products. While no official probe has been launched yet, Reuters reported that regulators are building a case.

Broader Scope of DMA Enforcement

Amazon is not the only tech giant facing scrutiny under the DMA. Alphabet’s Google, Apple, and Meta Platforms are also being investigated for potential breaches. The outcomes of these cases are expected to be determined by Ribera once she takes office.

The DMA represents a significant shift in how the EU seeks to regulate Big Tech, focusing on preventing anti-competitive practices on digital platforms. For Amazon, the stakes are high as it continues to operate under the spotlight of regulators determined to ensure a level playing field for businesses operating in the digital marketplace.

Source: Reuters