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Amazon May Be Willing to Settle EU Antitrust Case

Amazon is fighting battles against antitrust investigations across all fronts, whether in the U.S., or in other major markets worldwide. But in Europe, the e-commerce giant may soon look to concede in the form of a settlement, with potential fines and business-altering mandates on the horizon, according to a Reuters report.

An Amazon representative declined to comment.

The report said Amazon is engaged in “preliminary discussions” with the European Commission and its antitrust chief, Margrethe Vestager, and has offered concessions to address their concerns. These settlement talks can often take months to conclude, and there is no guarantee that both sides will reach an agreement.

In November 2020, the European Commission filed antitrust charges against Amazon, opening multiple probes related to both its use of non-public data to give it an unfair advantage to merchants that sell on its platform, as well as its preferential treatment of its own goods versus those from third-party sellers.

The “preferential treatment” battle is brewing elsewhere as a point of contention in Amazon’s business practices in India. Reuters has extensively investigated the company’s alleged attempts to skirt Indian e-commerce regulations, noting that it gave preferential treatment to a small group of sellers on its marketplace, including two that it owned in joint ventures. The most recent report cited thousands of internal documents and strategy plans indicating that Amazon creates its own private-label products and manipulates search results to boost its own products in the market.

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In the U.S., politicians have been investigating similar claims, with Sen. Elizabeth Warren (D.-Mass.) calling for the business to be broken up in response to the October Reuters report. The U.S. House of Representatives Antitrust Subcommittee introduced bills in June that could potentially force an Amazon split if the investigation—nearly two years in the making—ends in a federal lawsuit.

Washington D.C. Attorney General Karl A. Racine believed he had enough of a case to file antitrust suits against Amazon for imposing anticompetitive pricing on third-party sellers, and similar agreements on first-party sellers.

In the EU, the European Commission can fine companies up to 10 percent of their global sales in relation to antitrust investigations. On 2020 revenue alone, this would account for approximately $38.6 billion in fines for Amazon.

The European Commission isn’t the only body in Europe targeting Amazon. Luxembourg’s data protection commission, the CNPD, circulated a draft decision sanctioning Amazon’s privacy practices and proposing a fine related to alleged violations of Europe’s General Data Protection Regulation (GDPR), linked to the tech titan’s collection and use of personal data.

Initially reported at $425 million by The Wall Street Journal, the fine from the regulatory body ended up amounting to $887 million, according to a securities filing disclosed by Amazon in July. The CNPD proposed the fine among the E.U.’s 26 other national authorities.

E.U.-based regulators aren’t afraid to bring the hammer down on major retailers, handing Amazon a more difficult fight than it would have in the U.S. H&M found itself in the crosshairs of the Hamburg Data Protection Authority in December 2020 for the excessive monitoring and surveillance of several hundred employees, costing it $41.4 million in fines.

The U.K.’s top competition watchdog, the Competition and Markets Authority (CMA), is reportedly planning a formal competition investigation into the e-commerce giant as well. Like the other investigations, the inquiry into Amazon comes down to how the company uses and collects data on its platform and how that impacts which merchants and products are shown to consumers.

In particular, the U.K.’s possible investigation may focus on whether Amazon favors sellers that also use its logistics and delivery services when deciding who has access to both the company’s critical “Buy Box” feature and its Prime customers, according to the Financial Times report.

While the timing and the depth of the CMA investigation are still unknown, competition authorities in Italy and Spain have both conducted their own disciplinary actions against the tech giant. In retaliation, Amazon filed its own suit against the E.U. earlier this year, saying that it should not have given the Italian Competition Authority leave to bring the lawsuit, and that the Italian suit should have been folded into the larger E.U. case.