- Amazon is the subject of two preliminary antitrust probes in California and Washington State.
- The probes center on whether Amazon uses its marketplace to give advantage to its own products to the detriment of third-party sellers.
- The EU is reportedly gearing up to announce formal charges this month following an investigation into the same allegations.
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Amazon faces increased competition scrutiny even as the pandemic sends its retail business skyrocketing.
Investigators in two US states, California and Washington, are reportedly gearing up to launch antitrust probes into Amazon over whether it uses its marketplace to favor its own products over those of third-party sellers.
Questions over Amazon’s dual role running a retail platform while selling its own products on that platform are not new, but a Wall Street Journal report from April that Amazon employees were using sales data to develop products for the company thrust them back into the spotlight, and prompted Senator Josh Hawley to request a Department of Justice investigation.
In addition to being individually scrutinized, Amazon is being folded into more general national antitrust investigations into big tech. Axios reported Saturday a House tech competition probe has written to the CEOs of Amazon, Apple, Alphabet, and Facebook requesting they testify in July. The letters sent by the committee reportedly contained reminders that subpoenas could be used to compel CEOs to testify and provide documents.
Meanwhile the EU is reportedly getting ready to file formal antitrust charges against Amazon following its investigation into similar allegations. Once the charges are filed, the European Commission will rule on them, a process that could take a year and result in a fine of up to 10% of Amazon’s annual turnover.
These investigations are ramping up and coming to a head as Amazon deals with unprecedented demand. The company made $36.7 billion in net sales in the first quarter of 2020, meaning its fastest e-commerce growth in three years.
But Amazon’s physical sales aren’t the only element of its business model which has been called into question. In a June 11 union meeting, former Amazon exec and engineer Tim Bray said the company should be split up as its cloud computing business accounts for the bulk of its profit, allowing it to prop up the other parts of its business.
SEE ALSO: Amazon’s cloud generated over $10 billion in net quarterly sales for the first time ever — up 33% from a year ago
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