What it means for U.S. antitrust probes

first_imgMeanwhile, the EU hasn’t yet filed legal charges against Amazon, so it could be years before it announces any penalties. It could also reach a settlement with Amazon or drop the case altogether.Shared concerns Regulators in both Europe and the U.S. have objected to Amazon’s dual role as a marketplace operator and seller, arguing that this may foster anticompetitive conduct. They’ve pointed out that Amazon’s role as a marketplace service provider gives it privileged access to non-public third-party seller data, such as order volume history, shipping data and sellers’ past performance, that isn’t available to merchants. EU officials and Democrats in the House Judiciary antitrust subcommittee share the view that this data from third-party sellers is used to inform Amazon’s first-party business decisions, such as what products to introduce and where to set the price. The insight “allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers,” the EU said in a statement on Tuesday.Similarly, the antitrust subcommittee included testimony from third-party sellers in its investigation who said their businesses were damaged when Amazon launched competing products. For example, one retired third-party merchant was forced to exit his seller business after Amazon allegedly copied his products, “down to the color palette,” undercut him on price and “took over the Buy Box for his listings, ‘killing his sales,’” the antitrust subcommittee said, citing an interview with the seller.Amazon has long maintained that it doesn’t look at individual sellers’ data to build private-label products, as it would violate internal policies. The company has acknowledged, however, that it may refer to aggregate data in the process of building its own products. Amazon has also rebutted regulators’ claims that it exploits its control over the “Buy Box” to give preferential treatment to its own products and those featured by sellers who use its logistics and delivery service, called Fulfillment By Amazon. The “Buy Box” refers to a section off to the side of a product page where sellers compete for their offers to be featured. Amazon has maintained that the Buy Box show the offer it thinks customers will prefer, while factoring in things like price and delivery speed. At a July hearing in front of Congress, CEO Jeff Bezos acknowledged the Buy Box algorithm “indirectly” favors offers that can be shipped with Prime when determining which sellers are featured.The House antitrust subcommittee probe and the EU investigation raised questions about third-party sellers’ ability to reach Prime users.In the October report, U.S. lawmakers said they spoke to third-party sellers who feel they have “no choice” but to pay for Fulfillment by Amazon, which makes their products Prime eligible, in order to “maintain a favorable search result position, to reach Amazon’s more than 112 million Prime members, and to win the Buy Box.” Winning the Buy Box is crucial for third-party sellers products to be successful. The antitrust subcommittee estimated that roughly 80% of Amazon sales go through the Buy Box and “the percentage is even higher for mobile purchases.”Prime members are also an important source of revenue for third-party sellers because they tend to generate more sales on Amazon’s marketplace than non-Prime users, the European Commission said. Prime members don’t just spend more money per purchase, but they also tend to shop on the site more frequently. With the EU and the U.S. questioning Amazon’s market power over sellers, it’s now up to Amazon to provide proof that it treats merchants fairly.The company flatly disputed the House antitrust subcommittee’s findings, calling them “fringe notions.” Amazon can reply to the Commission’s conclusions in writing or via an oral hearing.“The ball is in Amazon’s court to disprove these allegations,” said Shaoul Sussman, a legal fellow with the Institute for Local Self-Reliance, a nonprofit.What’s nextThe EU and U.S. identified similar issues with Amazon’s treatment of sellers, but the potential penalties and remedies they could settle on are likely to be different.Democratic staffers in the House Judiciary subcommittee on antitrust recommended a wide range of remedies, including forcing companies to prove mergers would not harm competition and splitting different business units. For Amazon, this could result in it spinning off the third-party marketplace from its core retail operations.As for the FTC probe, Amazon could be hit with fines or the company could reach a settlement with the agency where it agrees to certain business restrictions.Similarly, the EU has a range of penalties it could propose, including a fine of up to 10% of Amazon’s annual global revenue, or up to $28 billion based on 2019 figures.The EU could also propose behavioral remedies, which attempt to preserve competition by requiring the companies to refrain from certain business conduct. But behavioral remedies can be “hit or miss” in terms of effectiveness, since some companies may find it “more profitable to violate the remedy and just pay the fines if they’re found in violation again,” Sussman said.The most aggressive tool in the EU’s arsenal would be to recommend a line of business separation, Sussman said. For Amazon, this might mean that the EU orders it to stop selling its private-label brands in Europe.“That type of decision won’t affect the U.S. or any other market where Amazon sells those goods, but they could say, if you’re transacting in Europe, you’re not allowed to be a brand owner or manufacturer and operator of the platform,” Sussman said.Sussman and other antitrust experts said they remain skeptical of whether the U.S. will be successful in bringing a case against Amazon and even if antitrust officials do, the remedies are likely to be limited. By contrast, European regulators have stepped up their efforts to crack down on big tech companies like Facebook, Google and Apple in recent years, earning them the reputation of being more aggressive.The U.S. and Europe have different approaches when evaluating whether a company is engaging in anticompetitive conduct.U.S. antitrust law is centered on the consumer welfare standard, which relies heavily on increased prices as an indication of harm. That standard has been hard to apply to tech companies because many of the products and services offered are free, or low cost, in the case of Amazon.In the U.S., a company like Amazon can argue that whatever harm it’s causing competitors is offset by any benefits to consumers, i.e. lower prices and greater selection, Sussman said.That argument is harder to prove in front of European antitrust enforcers. The EU takes a wider view when determining whether a company’s business practices are anticompetitive, including harms to consumer choice, potential competitors and innovation.As a result, it can be easier to bring an antitrust case in the EU than it is in the U.S., said New York University law professor Eleanor Fox. This is part of the reason why the U.S. is trying to catch up with EU regulators, Fox said, which have carried out a crackdown on U.S. tech giants including Google, Facebook and Apple.“That difference is what we’re struggling with and it’s why the U.S. has been so slow to make any claims at all,” Fox said. Amazon CEO Jeff Bezos on October 02, 2019.Elif Ozturk | Anadolu Agency | Getty Images The European Commission is still carrying out its investigation, but if it finds Amazon violated antitrust rules, the probe could provide new material to strengthen similar antitrust cases being built against Amazon in the U.S.Congress and the Federal Trade Commission are also investigating Amazon’s treatment of third-party sellers. It’s unclear what the scope of the FTC’s investigation is, but the agency has been interviewing third-party sellers as part of the probe, Bloomberg reported last September. The House Judiciary antitrust subcommittee published the results of its 16-month investigation into Amazon and other tech giants last month, where it found Amazon has monopoly power over third-party sellers on the marketplace.Both investigations are in different stages. After publishing a sweeping report on the competitive practices of Amazon, Apple, Google and Facebook, lawmakers are expected to introduce legislation based on their policy recommendations.- Advertisement – Amazon is facing renewed pressure to answer questions about its use of third-party seller data after European Union regulators brought antitrust charges against the company on Tuesday. Europe’s top antitrust watchdog, the European Commission, accused Amazon of violating competition law by using nonpublic data it gathers from third-party merchants to unfairly compete against them. It also opened a second investigation into Amazon’s business practices related to the Prime label and the “Buy Box,” which offers customers a one-click button to add a product to their shopping cart.Amazon rejected the European Commission’s accusations and said it supports thousands of businesses in Europe. – Advertisement –center_img – Advertisement – – Advertisement –last_img read more

Governor Wolf Orders Commonwealth Flags at Half-Staff to Honor Harold “Don” Whipple

first_img Flag Order Harrisburg, PA – Governor Tom Wolf has ordered all commonwealth flags on the Capitol Complex and at all commonwealth facilities in Lycoming County to fly at half-staff to honor Harold “Don” Whipple.Harold “Don” Whipple, 33, a Pennsylvania Department of Transportation employee, died after being involved in a severe motor vehicle accident on Wednesday, August 3, 2016 while performing his job duties.Flags shall be lowered to half-staff and remain lowered until sunset on Monday, August 15, 2016.Like Governor Tom Wolf on Facebook: Facebook.com/GovernorWolf Governor Wolf Orders Commonwealth Flags at Half-Staff to Honor Harold “Don” Whipple SHARE Email Facebook Twittercenter_img August 10, 2016last_img