The European Union is likely to launch an investigation next year into whether Amazon favors its own brand products on its online marketplace, according to sources familiar with the matter. This potential probe comes as European antitrust regulators build up a case under the landmark Digital Markets Act (DMA).
If found guilty of breaching the DMA, the U.S. online retailer could face a fine of up to 10% of its global annual turnover. The decision regarding the investigation’s commencement and timing will be made by incoming EU antitrust chief Teresa Ribera in the coming months. Ribera, a Spaniard, is scheduled to assume her post next month, succeeding outgoing Margrethe Vestager.
Amazon has stated that it complies with the DMA and has engaged constructively with the European Commission regarding its plans since two of its services were designated as important gateways. The DMA, which became effective last year, prohibits Amazon and six other major tech companies from prioritizing their products and services on their platforms, among other stipulations.
Amazon’s shares experienced a decline, falling as much as 3% to $196.91 following the news. In March, the European Commission, which acts as the EU’s antitrust enforcer, announced it was gathering information on Amazon’s treatment of its own brand products on the Amazon Store. The Commission declined to comment on the recent developments.
In its compliance report from March, Amazon stated that its ranking models do not differentiate based on whether a product is sold by Amazon Retail, a third-party seller, or if it is an Amazon-branded product. Currently, Apple, Alphabet’s Google, and Meta Platforms are also under investigation under the DMA. Ribera is set to make decisions regarding these investigations, not Vestager.
The EU’s scrutiny reflects its ongoing efforts to regulate the power of large tech companies and ensure fair competition within the digital marketplace.
