Amazon to face potential antitrust lawsuits in Europe


Big tech companies have been facing increased regulatory pressure from lawmakers around the world. One example is Google (NASDAQ: GOOG), which has already received formal antitrust charges by the Justice Department, a move that has only further emboldened non-U.S. regulators. As it turns out, officials from the European Union (EU) are squaring up to file a potential antitrust lawsuit against Amazon (NASDAQ: AMZN) as well.

The European Commission, the leading antitrust regulator in the EU, issued a statement against Amazon that claimed the company uses data it gathers from third-party sellers to eventually compete and put them out of business. This isn’t the first time that Amazon has faced these kinds of claims, but this case from the EU marks one of the biggest potential legal battles that Amazon could end up facing.

We do not take issue with the success of Amazon or its size. Our concern is very specific business conduct which appears to distort genuine competition,” said European Commission Executive Vice President Margrethe Vestage. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” Amazon responded in a press release.

The EU had already said that it was planning to press charges again Amazon back in June. A final decision on Amazon’s supposed antitrust practices is expected to take place sometime next year. If guilty, the company would be forced to pay as much as 10% of its annual global revenue to the EU, which could cost the company tens of billions of dollars. Of course, Amazon has the right to challenge any such ruling in an EU court, something which it almost certainly will do, but its uncertain whether the company stands a real chance in court.

Shares of Amazon were down around 4% on Tuesday following the news. Over the past month of so, Amazon has lost around 10% of its total market value, while still up quite substantially since the beginning of 2020. Like most other tech companies, major regulatory actions remain a growing risk for Amazon, which has long been accused of using the data its platform collects to beat out third-party sellers.

The EU has already undergone investigations into other tech giants, such as Apple, Facebook, and Google. Regulators in the bloc have already filed more than $9 billion worth in fines between the three companies, with potentially more to come soon.


Amazon Company Profile

Amazon is among the world’s highest-grossing online retailers, with $233 billion in net sales and roughly $311 billion in estimated physical/digital gross merchandise volume in 2018. Online product and digital media sales accounted for 53% of net revenue in 2018, followed by commissions, related fulfillment and shipping fees, and other third-party seller services (18%), Amazon Web Services’ cloud computing, storage, database, and other offerings (11%), Prime membership fees and other subscription-based services (6%), product sales at Whole Foods and other physical store retail formats (7%), and advertising services and cobranded credit cards (4%). International segments constituted 32% of Amazon’s non-AWS sales in 2018, led by Germany, the United Kingdom, and Japan. – Warrior Trading News