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The European
Commission has laid out a first set of antitrust charges against Amazon. The
company is focused on its dual role as a platform for other sellers
but also as a retailer itself on its own platform. More so, is its cumulative
use of third-party merchant data to underpin Amazon’s own retail decisions.
Competition
chief Margrethe
Vestager said its preliminary conclusion is that the ecommerce
giant has abused its market position in France and Germany- these are its two
biggest markets in the EU. How? Via its
use of big data to “illegally distort” competition into online retail markets.
“Amazon is data
driven. It’s a highly automated company — where business decisions are based on
algorithmic tools,” said Vestager. “Our investigation shows that very granular,
real-time business data relating to third party sellers’ listings and
transactions on the Amazon platform systematically feed into the algorithm of
Amazon’s retail business. It is based on these algorithms that Amazon decides
what new products to launch, the price of each individual offer, the management
of inventories, and the choice of the best supplier for a product.”
The competition chief
said its preliminary concern is that third party sellers are unable to compete
on the merits as a result of the big data advantage Amazon gleans from its
access to third party sellers’ data.
“Amazon has, for
example, access to data on the number of ordered and shipped units of sellers’
products, revenues on the marketplace, the number of visits to sellers’ offers,
information relating to shipping — including the past performance of the
seller, the consumers’ claims on the sellers’ products including the activated
guarantees. And Amazon gets this data from every seller, every listed product,
every purchase on its platform.”
Amazon may have set
certain rules on its platform that artificially favours both its own retail
offers as well as the offers of sellers that use Amazon’s logistics and
delivery services.
Under current US
law, monopolies are legal. But what is not allowed is the corporate malfeasance
designed to preserve monopoly power, at the expense of competition. Like
Amazon, other tech giants have also maintained their monopoly position by using
the vast amounts of data they have gathered on both sellers and consumers. They
use the data to muscle out rivals, gain an advantage in new product markets and
reduce innovation by others. That conduct, according to the House antitrust
report, is anti-competitive.
In line with the
move of US and EU in curbing the power of internet giants, China too has
proposed new regulations to define anti-competitive behaviour for the tech
sector. This could affect China’s tech giants like Alibaba, Ant Group, Tencent
as well as Meituan.
What about
Malaysia? We are so simple and trusting in surrendering our data to huge
telcos, banks, government agencies, e-wallet payment systems and many others.
Its possibly fine if they are only using it for marketing purposes. But what
happens if you have great scammers who use the data to fleece you? Police
reports are futile. We need a more transparent data reporting and data
monitoring system that provides confidence to the consumer. The likes of Amazon
will procure, sell and profit from data that leads them not only to be a
monopoly but destroy any competition.
Reference:
1.
Natasha Lomas, Europe lays out antitrust case against
Amazon’s use of big data https://techcrunch.com/
2.
'Near-perfect market intelligence': Why a House report
says Big Tech monopolies are uniquely powerful, 10 Oct 2020, CNN
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