European Executive Vice-President Margrethe Vestager gives a press conference on an anti-trust case with Amazon.com Inc. at the European Commission in Brussels on Tuesday.
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Antitrust charges by the European Union against Amazon.com Inc. could portend a slew of actions against Big Tech in the U.S. — including, perhaps — Amazon.
The e-commerce giant AMZN, -3.41% received a statement of objection “with preliminary conclusions that Amazon illegally distorted competition in online retail markets,” Margrethe Vestager, the European commissioner overseeing competition and digital policy, said at a news conference Tuesday.
She also announced the commission has decided to open a second investigation into Amazon over its e-commerce practices, including the role of Amazon Prime. Amazon shares were down 4% in late-afternoon trading Tuesday.
Also read: Amazon has been hit with antitrust charges from the EU and faces investigation into Prime
The path to more antitrust scrutiny is clear. Shortly after the EU’s announcement, Rep. David Cicilline, D-R.I., chairman of a House antitrust subcommittee, applauded the charges and doubled-down on his committee’s vow to consider legislation regulating some of tech’s biggest players.
“Because of its immense power, Amazon currently can get away with arbitrarily suspending sellers, increasing and changing seller fees overnight, and free riding off of entrepreneurs’ investments and hard work by appropriating their ideas and competitively sensitive data,” Cicilline said in a statement Tuesday. “Sellers do not have recourse or a competitive alternative to Amazon’s marketplace. They are stuck.”
Cicilline emphasized in his remarks that bipartisan support of regulation was evident after more than a year of hearings and investigations of the four tech companies.
With a new incoming president and control of the Senate still undecided, Big Tech is bracing for a rough patch in 2021 and beyond. Alphabet Inc.’s GOOGL, -1.40% GOOG, -1.30% Google was sued by the Justice Department in October, and Facebook Inc. FB, -2.36% is bracing for an action by the Federal Trade Commission as early as late November. It remains to be seen whether the Justice Department and FTC proceed with actions against Apple Inc. AAPL, -0.21% and Amazon, respectively.
Attention could first focus on Amazon, based on the EU action, say financial analysts and tech observers.
“At the end of the day, we have both sides of the aisle looking at reining in big tech,” Michael Transon, chief executive of search-engine optimization company Victorious, told MarketWatch. “There are certainly parts of the EU case taking on Amazon that could find its way into charges brought in the U.S.”
“The EU’s claims against Amazon rest on an innovative theory about data,” said Shubha Ghosh, director of the Syracuse Intellectual Property Law Institute law professor. “Misuse of data is not thought of as the concern of competition law, but here the regulator’s theory rests on abuse of dominance in using a valuable resource in contemporary electronic commerce: private consumer data.”
“Whether the U.S. will follow suit depends on how bold a Biden Justice Department might be,” Ghosh said.
In a Nov. 10 note, AB Bernstein analyst Mark Shmulik said he believes an EU investigation can take two to three years, based on the EU’s 5-year probe of Google Search and 7-year investigation of Google Shopping.
Added Anurag Chandra, a partner at venture-capital firm Fort Ross Ventures: “Amazon is susceptible in how it approaches the marketplace. They identify successful products, compete with them, and then elevate their products visibility. That begs further inquiry.”
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