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Amazon to Face EU Antitrust Charges, Says Report

By Donna Fuscaldo – Jun 11, 2020 at 10:47AM

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The EU will allege Amazon harmed third-party sellers by accessing their data to compete against them.

Amazon (AMZN -3.01%) is about to get hit with antitrust charges by the European Union, reports The Wall Street Journal

The paper, citing people familiar with the matter, reported that the charges stem from the tech stock's behavior toward third-party sellers in Europe.

A competition law text book sitting on a desk.

IMAGE SOURCE: GETTY IMAGES.

The EU is expected to allege Amazon used data from merchants on its platform to launch similar products under its private label brand. The European Commission's charges against one of the world's largest e-commerce companies could happen in the next two weeks, capping a two-year investigation into Amazon's business practices.

For weeks, Amazon has been facing allegations it's harming sellers on its platform after a WSJ expose revealed that some Amazon employees had used data from independent sellers to determine pricing on Amazon's own competing products, which features to copy, and whether Amazon should enter a product category. Amazon has launched an internal investigation based on the WSJ's reporting. The company had previously testified before Congress that it doesn't use data on individual merchants but relies instead on aggregated data from third-party sellers.

Senator Josh Hawley, a Republican from Missouri and a long-term critic of big tech, in late April asked the U.S. Department of Justice to launch a criminal investigation into Amazon over its treatment of third-party sellers. Hawley wants the DOJ to investigate it for antitrust violations and to impose criminal penalties on companies that exhibit monopolistic behaviors.

Once the EU files antitrust charges against Amazon, it could take a year or longer to decide if the tech stock ran afoul of competition laws in Europe. If it is found to be guilty, Amazon could face a fine of as high as 10% of its yearly revenue, notes the WSJ.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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