Amazon’s best selling wholesales have long accused the company of mining
their sales data to discover which products are most profitable; then
Amazon clones the product and offers it for sale at a lower price than
the wholesales can afford (because Amazon doesn’t have to worry about a
wholesale-retail markup when it’s both wholesaler and retailer at once)
and tweaks its search and recommendation system to drive sales to its private-label versions of its partners’ products.
This is the kind of thing that US antitrust regulators have turned a blind eye to for 40+ years, since University of Chicago economists dripped poison in Ronald Reagan’s ear,
shifting antitrust enforcement to the “public harm” standard, in which
companies are only punished for monopolistic activities that raise
prices, not those that limit competition.
But the EU is emerging from this “public harm” standard to a more robust
antitrust framework, driven by the crusading trustbuster Margrethe Vestager, who has capitalized on the EU’s delight at a covert trade war with the US to visit stonking great fines upon US Big Tech.
Now the European Commission has announced that it will subject Amazon’s
predatory private-label practices (say that six times fast!) to
antitrust investigations, relying in part on insider/whistleblower
confirmation that the Amazon’s suppliers’ theories are correct.
Given the multibillion-dollar fines the Commission has smacked other US
companies with, this is a pretty significant announcement.
This antitrust announcement pairs very well with Stacy Mitchell’s analysis of how Amazon’s #HQ2 search process
resulted in the company amassing mountains of useful market
intelligence on the plans cities have made for their futures, which the
company can use to outmaneuver its competitors, even in cities where it isn’t going to build a new headquarters.
