A 'fundamental legal' question at the heart of the EU's probe into Amazon
The European Union has launched an antitrust investigation into whether data Amazon (AMZN) collects on third-party merchants as part of standard agreements unfairly boost sales of Amazon’s own products. The EU is also looking into how the data selects merchandise for the coveted “Buy Box” section of Amazon’s website, which drives the vast majority of sales on the site. Whether Amazon’s dual role as a merchandise platform and seller violates antitrust rules will be evaluated under a different and arguably more stringent antitrust framework than exists in the U.S. “A fundamental legal question is whether or not, or to what extent, Amazon, as a platform, needs to treat Amazon Retail just as it treats every other merchant,” says Nikolas Guggenberger, an Assistant Professor at Münster Law School. It's not entirely clear whether an obligation to treat subsidiaries in a neutral manner only arises if an entity owns an “essential facility,” or whether there’s an obligation for neutrality simply based on a company’s “dominant position in the market.” Essential facilities are those that a monopolist controls and are necessary for effective competition. U.S. courts, on the other hand, generally require a much higher percentage — around 70%, Guggenberger said. Even in the EU, “you very rarely get to a situation where you have a dominant position,” he said. If EU authorities conclude that dominant market share is enough to trigger a vertical company’s responsibility to deal with their subsidiaries in the same way they interact with their competitors, then defining Amazon’s market share may still prove elusive.