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Is there really an antitrust case against Amazon in Europe?

Updated: Dec 4, 2020

A newspaper reader will answer this question with a yes. Yes, there is an antitrust case against Amazon in Europe. On November 10, 2020, the European Commission sent, after more than a one-year investigation,[1] its statement of objections to Amazon “for the use of non-public independent seller data”.[2] The Commission also opened a second investigation as regards an alleged preferential treatment of its own retail offers and of third-party retail offers “that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”)” in the “Buy Box”.



The allegations are absolutely not new. On October 6, 2020, both allegations have been underscored by the House Judiciary Committee’s Antitrust Subcommittee in its 450-page report on competition in digital markets.[3] Here, a short bracket. The title “investigation of conduct by Google, Apple, Facebook, and Amazon in digital markets” is more accurate as the Committee only focuses on these firms and tries to prosecute them based notably on allegations from rivals and plaintiffs. In Europe, the second investigation is already under scrutiny by the Italian Competition Authority since April 16, 2019.[4] The Austrian Competition Authority opened an investigation about the self-preferencing aspect, but closed it on July 17, 2019.[5] Moreover, it is worth noting that the Canadian Competition Authority has opened a similar investigation on apparently both allegations on August 14, 2020.[6]

Amazon is under fire and in a world war with competition authorities. But, if a third-party observer cannot confirm or refute these allegations in the absence of direct access to evidences, she/he can probably try to figure out whether Amazon is in a dominant position.



Indeed, it is crucial as the investigations focus on alleged abuses of dominance. Therefore, from an antitrust perspective, one has to define a dominant position and then an abuse.

The tricky question is then: Is Amazon a dominant firm?

Well, it is all about market definition. Competition lawyers and economists like that step. It is the bread and butter of antitrust experts and the starting point of an investigation. While they will try to broaden the market to avoid the finding of a dominant position, competition authorities will instead try to narrow the market to find one.

What is the market definition in the EU’s investigations? It is not very clear. The Commission seems to focus on the “online retail markets”.[7] But, the Commission also seems to consider “the market for the provision of marketplace services”.[8] Are they both synonyms? In the latter, is it the market for the provision of marketplace services to consumers or to third-party sellers? For sure, these definitions will be contested by Amazon’s antitrust lawyers and economists. Prepare your popcorn, the battle will be interesting. They have two strong arguments in their pockets to demonstrate that Amazon is not in a dominant position. The remainder of this opinion will focus on the first definition “online retail markets” in the absence of further precisions from the press release.



First, the Commission indicates in its second press release that France and Germany are “the biggest markets for Amazon in the EU”. Therefore, let’s focus our research on the French and German online retail markets. In Germany, according to the Händlerbund, the largest e-commerce association in Europe, Amazon’s market share in the German online retail markets is 28.7% in 2018.[9] In France, according to the FEVAD, the French e-commerce association, Amazon’s market share in the French online retail markets is 20% in 2020.[10] Conclusion, Amazon is far from being dominant in the French and German online retail markets. This is an atomic bomb. Amazon is not dominant in its biggest markets (here, one can therefore infer that Amazon is not dominant in its other markets in Europe). Accordingly, an abuse of a dominant position cannot be characterized. End of the story. The Commission loses the battle.



Second, they will try to broaden the market. And, this can be done easily. Indeed, the French Competition Authority (FCA) has defined, in FNAC/DARTY, the market by including in-store and online retail channels.[11] This practice has been included in its 2020 guidelines regarding merger control.[12] The rationale is simple. According to the FCA, online stores, including pure payers (e.g. Amazon, Cdiscount) and offline stores’ own websites (so-called “phygital”), compete directly with offline stores (or brick-and-mortar stores).[13] This can easily be observed by a non-antitrust expert in this time of lockdowns where consumers can either buy online and receive their orders at home or buy online and withdraw their orders in physical stores (so called “click-and-collect” or as defined by the FCA “click-and-mortar”). This is a hydrogen bomb. Amazon’s market share in the online and offline retail markets might well be significantly lower. To my knowledge, there is no independent data on that share in France and Germany, and more broadly in Europe.


To conclude, regardless of the alleged anti-competitive conducts, without a finding of dominance, the Commission will face a hard time to find an abuse of a dominant position. Thus, from an antitrust reader perspective, there is apparently no antitrust case against Amazon in Europe.



[1] European Commission, press release, Antitrust: Commission opens investigation into possible anti-competitive conduct of Amazon, 17 July 2019 (accessed 11 November 2020).

https://ec.europa.eu/commission/presscorner/detail/en/IP_19_4291

[2] European Commission, press release, Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices, 10 November 2020 (accessed 11 November 2020).

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2077

[3] The House Judiciary Committee’s Antitrust Subcommittee, Investigation of competition in digital markets, 6 October 2020.

https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf

[4] Autorità Garante della Concorrenza e del Mercato (AGCM), press release, A528 - Amazon: investigation launched on possible abuse of a dominant position in online marketplaces and logistic services, 16 April 2019 (accessed 11 November 2020).

https://en.agcm.it/en/media/press-releases/2019/4/A528

[5] Bundeswettbewerbsbehörde (BWB), press release, Austrian Federal Competition Authority initiates investigation proceedings against Amazon, 14 February 2019 (accessed 11 November 2020).

"It is suspected that Amazon discriminates against other retailers and thereby tries to inordinately favour its own products on the Amazon marketplace."

https://www.bwb.gv.at/en/news/detail/news/austrian_federal_competition_authority_initiates_investigation_proceedings_against_amazon/

BWB, press release, BWB informs: Amazon modifies its terms and conditions, 17 July 2019 (accessed 13 November 2020).

https://www.bwb.gv.at/en/news/detail/news/bwb_informs_amazon_modifies_its_terms_and_conditions-1


[6] Competition Bureau Canada, press release, Competition Bureau seeks input from market participants to inform an ongoing investigation of Amazon, 14 August 2020 (accessed 11 November 2020).

https://www.canada.ca/en/competition-bureau/news/2020/08/competition-bureau-seeks-input-from-market-participants-to-inform-an-ongoing-investigation-of-amazon.html

[7] European Commission, press release, Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices, 10 November 2020 (accessed 11 November 2020).

The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets.”

[8] Ibid. “The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU.”


[9] Händlerbund, E-commerce in Germany (accessed 11 November 2020).

https://www.haendlerbund.de/en/downloads/whitepaper-german-ecommerce.pdf


[10] Le Figaro, Quelle est la part d'Amazon dans le commerce en ligne en France ?, 2 November 2020 (accessed 11 November 2020).

https://www.lefigaro.fr/conso/quelle-est-la-part-d-amazon-dans-le-commerce-en-ligne-en-france-20201102


[11] Autorité de la concurrence (Adlc), press release, 18 July 2016 : Retailing of "brown" and "grey" products, 18 July 2020 (accessed 11 November 2020)

https://www.autoritedelaconcurrence.fr/en/communiques-de-presse/18-july-2016-retailing-brown-and-grey-products


[12] Adlc, Lignes directrices de l’Autorité de la concurrence relatives au contrôle des concentrations, 2020, paras. 838-841.

https://www.autoritedelaconcurrence.fr/sites/default/files/Lignes_directrices_concentrations_2020.pdf


[13] Adlc, press release, The Autorité has published a study on competition and e-commerce, 5 June 2020 (accessed 11 November 2020).

https://www.autoritedelaconcurrence.fr/en/press-release/autorite-has-published-study-competition-and-e-commerce

The physical distribution model is facing strong competition from the growth of online sales, which may be the result of “pure play” online retailers and strategies using alternative distribution channels.”

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