EU Charges Amazon With Antitrust Violations. Online Retail Platform Faces Potential Penalties of $37 Billion
Amazon's monopoly power and self-preference are focus of the probe
November 19, 2020
November 13, 2020, Los Angeles, CA – The European Union formally charged Amazon with antitrust violations for abusing its dominance in online shopping and using non-public data gathered from sellers to make informed decisions on its own products. A second probe focuses on whether Amazon favors its own retail offers or those of marketplace sellers who use its logistics and delivery services. The criteria Amazon uses to select products featured in its prominent "Buy Box" are also scrutinized.
Amazon's business practices marginalize third-party sellers and cap "their ability to grow," says the European Commission's top antitrust official, Margrethe Vestager. EU officials have a track record of hitting U.S. tech companies such as Google (NASDAQ: GOOGL) with fines worth billions, and Amazon may suffer the same fate.
The probe could expose Amazon to potential fines of up to 10% of its annual global sales, implying a maximum penalty of around $37 billion based on the company's revenue forecasts this year.
A parallel investigation by a U.S. Congress Subcommittee concluded, "Our economy and democracy are at stake." Particularly alarming for Amazon sellers, suppliers, and consumers is Amazon's monopoly power to self-preference and disadvantage competitors in ways that undermine free and fair competition, bullying of its retail partners, and improperly using third-party data for its strategy for developing and selling its own private-label products. Amazon has acquired at least 100 companies.
Amazon Vice President of Worldwide Customer Trust and Partner Support, Dharmesh M. Mehta, represented Amazon before a Congress Subcommittee hearing in March 2020. His testimony confirmed Amazon's shocking business practices and behavior, illuminating a reprehensible and manipulative global system of counterfeits, fraud, deception, misrepresentation, and false advertising.
Amazon is a voracious churner of counterfeit, fraudulent, and replica items, indifferent to the damage they cause to consumers, legitimate sellers, and manufacturers while fulfilling their desire to be the sole source of items for purchase. While Amazon is destroying worldwide businesses and endangering consumers, there is no incentive to clean up their websites -- they make too much money. The global juggernaut, headed by the world's richest man, paid no federal income tax on $11.2 billion in profit in 2018 and a 1.2% tax rate on a $13.3 billion profit in 2019.