Brussels So Far Lacks Evidence In Amazon Antitrust Probe

Regulators in Brussels have so far failed to find enough evidence to file antitrust charges against Amazon, the Financial Times (FT) reported on Thursday (March 11), citing sources.

European Union (EU) regulators have been working on the landmark case for nearly two years, sources told FT. The case stemmed from accusations in 2019 that the eCommerce giant was tweaking search algorithms to favor its own merchandise over competitors’ options. Competition regulators alleged that the practice resulted in shoppers spending more for lower-quality products.

Antitrust enforcers have yet to comprehend how Amazon’s algorithm works. Officials have posed numerous questions to the company about how the search results rank particular products. Officials were likely not able to access Amazon’s proprietary code due to legal issues surrounding trade secrets, sources told FT. Antitrust investigators often have difficulty navigating tech firms’ “black boxes” that contain proprietary and other code.

“Cases involving algorithms are complex,” a Brussels legal expert told FT. “But the EU doesn’t have to dictate how a computer code works. It is for the company that uses the algorithm to deliver a fair result.”

Further complicating the case is the fact that Amazon makes the bulk of its profits from third-party retailers on its platform, sources said. EU officials have seen evidence that it’s not in the company’s financial interest to promote its own merchandise. “Why would Amazon want to worsen the customer experience if customers will realize they can get better quality products for cheaper elsewhere?” a source with information about Amazon’s defense posed to FT.

Antitrust investigations usually take years, and it is possible that the EU’s case in Brussels against Amazon could still see a victory.

Amazon filed a lawsuit against the EU in January, accusing its competition watchdog of giving latitude to Italian antitrust regulators. Amazon cried foul when the EU empowered the Italian Competition Authority to file its own lawsuit.

EU Competition Chief Margrethe Vestager said in November 2020 that formal antitrust charges would be filed against Amazon over how it uses seller data. The investigation, which dates back to 2018, was updated with a charge sheet regarding Amazon’s possible abuse of power by using merchants’ data against them.