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Amazon faces EU probe as Vestager plans summer finale

While it will be the first time the EU has directly targeted Amazon’s online retail business model, it’s the third time the company has been probed by the regulator, following tax and e-book investigations.

By: Bloomberg | Updated: July 16, 2019 5:41:52 pm
Amazon, Margrethe Vestager, Amazon Europe, Apple, Qualcomm, Google, Alphabet, Amazon Taxes, Jeff Bezos, Amazon Jobs, Spotify The probe comes as Qualcomm Inc could be hit with a second hefty EU penalty as soon as next week for allegedly underpricing chips to squeeze a smaller competitor. (Image: Bloomberg)

Amazon.com Inc is to be investigated by the European Union as the bloc’s antitrust chief Margrethe Vestager prepares for a summer finale to her five-year crackdown on US technology giants. The Dane, who heads the EU’s competition division, is poised to open a formal investigation into Amazon within days, according to two people familiar with the case, who asked not to be named because the process isn’t public. Vestager has hinted for months that she wanted to escalate a preliminary inquiry into how Amazon may be unfairly using sales data to undercut smaller shops on its Marketplace platform.

The probe comes as Qualcomm Inc could be hit with a second hefty EU penalty as soon as next week for allegedly underpricing chips to squeeze a smaller competitor. The US chipmaker was fined last year for thwarting rival suppliers to Apple Inc and has been the subject of on-and-off antitrust scrutiny since 2005.

Vestager has already slapped Google with record fines and ordered Apple to repay billions of euros in back taxes. By taking on Amazon’s Chief Executive Officer Jeff Bezos, Vestager is keeping up the pressure on big tech right to the very end of her mandate, due to end in October. Amazon and the European Commission in Brussels both declined to comment on the plans to open the probe. Qualcomm representatives declined to immediately comment.

Business Model

While it will be the first time the EU has directly targeted Amazon’s online retail business model, it’s the third time the company has been probed by the regulator, following tax and e-book investigations.

Also Read: Amazon plans high-end Echo, ramps up work on Alexa home robot

Opening a formal probe means regulators can start building firm evidence of antitrust violations, a process that can lead to a charge sheet, or statement of objections, and may eventually culminate in fines or an order to change the way a business operates.

Although Google has been fined once a year for the past three years, racking up 8.2 billion euros ($9.2 billion) in penalties, the Alphabet Inc unit still faces early-stage inquiries into local business and jobs searches. Apple also has to contend with a complaint from Spotify Technology SA and Facebook Inc is getting questions on how it uses and shares data from apps.

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