5 Things You Need To Know About Amazon Antitrust Probe >> The guide shares details about the antitrust probe against Amazon that European Commission formally opens.
Amazon is the giant of 21st-century e-commerce. Apart from being a retailer, Amazon is now a delivery and logistic network, marketing platform, credit lender, payment service, producer of series and movies, auction house, book publisher, manufacturer and lead in cloud server space.
Amazon has registered a staggering growth over time and enjoyed meager profits by choosing prices below cost and expanded significantly. With this policy, Amazon emerged as the leader of ecommerce and now serving as essential infrastructure for different businesses.
But, European Commission recently opened a formal antitrust probe against Amazon. Here are the 5 things you need to know about Amazon antitrust probe.
Why is Amazon Targeted for Antitrust Probe?
Amazon is the ecommerce giant attracting over two million visitors every month in America. Around 40% of consumers from America spend money online on Amazon. Half of the products sold on the website are sourced from different retailers who pay a commission to Amazon for each sale.
One-third of online retailers are presently selling goods on Amazon, and they are paying higher commissions to promote their brand and products on Amazon. The interesting part is that Amazon focuses on converting the retail element into one platform, considering itself a marketplace, retailer, logistic supplier and more.
Physical stores are expanded, and the success of such expansion raised one question about the antitrust policy. The multi-levelled delivery system of Amazon attracted the attention of different regulators.
5 Things You Need to Know About Amazon Antitrust Probe
Antitrust Investigation is in Trend Again
The antitrust law was implemented to highlight consumer welfare and the protection of competition. It focuses on prohibiting cartels from fixing the rates of products and prevents mergers that lead to specific monopolies.
In the early 20th century, the first antitrust law was implemented in the United States in response to the monopolies that emerged from John D Rockefeller Standard Oil that controlled 90% of refined oil products.
Since Amazon has lowered the prices for the customers and heightened the product choices, the antitrust regulators are now imposing the law to identify and control the market power growth of the company.
Market Dominance is not Under Antitrust
Amazon attracts consumers with better quality, lower prices and being innovation. Amazon emerged as an e-commerce giant by offering better services than others, and it did so early. However, Amazon has never restricted any businesses from entering the ecommerce platform. Amazon always has a question on how businesses define market affects how leading you are alleged to be.
So, why Amazon should be penalized for its success? Amazon also has opportunities to offer other products and services. In addition, it helps to make profits on other activities like virtual advertisements. So, by taking apart Amazon, a higher risk is imposed on consumers and being a giant doesn’t mean that it has violated antitrust.
Antitrust Law is Challenging to Make Fix
The antitrust law has not experienced any great success in the past 50 years. The business model and technology aiding the law are moving rapidly, but it has not improvised the legislation’s potential backing antitrust. Moreover, many big enterprises and businesses have faced the antitrust probe earlier, and none of them was broken up. So, it is challenging to think of a ten-year legal battle to decide the verdict of an antitrust case today.
Huge fines and penalties result from many antitrust probes, combined with the undertaking of the creation to control the operations. So, suppliers and retailers involved in the Amazon platform would find new ways for benefits.
Refreshment Stands are made
FTC (Federal Trade Commission) probed against tech giant Microsoft, accusing the firm of using the desktop OS monopoly to suppress the rival, Netscape. Microsoft was found guilty and ordered the firm to split in two.
However, the reverse order was appealed, and the case was settled. The lawsuit changed the corporate culture and converted the company less aggressive toward the rivals. So, the verdict of the probe was unforeseen consequences.
Responsive Players Have More Benefits
Amazon is undoubtedly the crucial ecommerce platform, and it is here to last for years. So, the teams can exploit the data coming from the Amazon database. So, to prevent the antitrust probe, Amazon needs to be perceived as flaxen to the sellers and retailers by supplying them more data and easy access to the 3rd party tools.
Whether the antitrust probe would be successful in the long run or not, it makes sense of using the Amazon consumer data by sellers to succeed and compete, even with the large brands and companies.
These are the 5 things you need to know about Amazon antitrust probe. The European Commission opened the formal probe against Amazon to use sensitive data of retailers who sell on their marketplace, breaching the EU competition rule. Also, you may read here about Google To Face Antitrust Probe.
Do you have anything to add here about the probe? Would you like to share it in the comment section?