The European Commission has officially launched an investigation into billionaire Jeff Bezos’s e-commerce company, Amazon regarding measures aimed at safeguarding consumers, particularly against illegal products.
On Wednesday, November 15, Brussels requested detailed information from Amazon, seeking clarity on the company’s adherence “to provide more information on the measures taken to comply with the risk assessment and mitigation obligations aimed at protecting consumers, in particular about the distribution of illegal products”.
Bezos founded Amazon in mid-1994 on a road trip from New York City to Seattle.
This move follows a similar investigation initiated by Brussels at the beginning of November into AliExpress, a Chinese online sales site, over concerns about distributing illegal products, including counterfeit medicines.
The European executive is intensifying its scrutiny of major online platforms, responding to the implementation of the DSA in late August, which imposed new obligations on nineteen leading internet companies.
What this means
The Commission, tasked with enforcing the DSA, has the authority to penalize companies found in violation.
The inquiry also delves into issues surrounding the protection of fundamental rights and the compliance of recommendation systems with the new regulations, particularly addressing concerns about personalized product recommendations and the exploitation of personal data.
Amazon is required to furnish the requested information to the Commission by December 6, 2023. The Commission will then assess Amazon’s responses to determine the subsequent course of action.
The statement read,
- “Amazon must provide the requested information to the Commission no later than December 6, 2023. Based on the evaluation of Amazon’s responses, the Commission will determine the next steps”
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While the request for information is not a formal challenge at this stage under the DSA, it marks the initial step in a process that could potentially lead to substantial financial penalties for proven and prolonged regulatory infringements. In extreme cases, fines may reach up to 6% of the global turnover of the implicated companies.
As part of the broader DSA framework, the European Commission also announced on Friday an inquiry into the measures adopted by Meta (parent company of Facebook and Instagram) and Snap (Snapchat) to protect minors, focusing on their “physical and mental health.”
This follows a similar approach targeting TikTok and YouTube, with prior requests for information sent to Meta and TikTok, owned by the Chinese group ByteDance.
Backstory
This is not the first time; Amazon is being probed over various issues. In 2020 the European Union regulators leveled antitrust charges against Amazon, accusing the e-commerce giant of using nonpublic data from third-party merchants to gain an unfair competitive advantage over smaller sellers.
The European Commission initiated a second investigation into Amazon’s business practices concerning the Prime label and the “Buy Box.”
Amazon, rejecting the accusations, asserts its support for thousands of businesses in Europe. If the European Commission finds Amazon in violation of antitrust rules.
Also, it had a similar case in the U.S., where Congress and the Federal Trade Commission were also probing Amazon’s treatment of third-party sellers.
The EU investigation and the House antitrust subcommittee probe raised concerns about Amazon’s dual role as a marketplace operator and seller, particularly its access to nonpublic third-party seller data.
Both investigations questioned whether this data informs Amazon’s business decisions, potentially leading to preferential treatment for its products and those using its logistics service.
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