Report about Amazon’s use of seller data could factor into antitrust investigations

A Wall Street Journal report revealed that Amazon employees in some instances may have used third-party seller data to inform the development and launch of the company’s own competing private-label products.1https://www.wsj.com/articles/amazon-scooped-up-data-from-its-own-sellers-to-launch-competing-products-11587650015 The conduct is likely to be of interest to ongoing investigations by antitrust authorities in the US and Europe.

The European Commission has an open antitrust investigation into Amazon’s use of seller data,2https://ec.europa.eu/commission/presscorner/detail/en/IP_19_4291 while the US Federal Trade Commission is conducting a broad antitrust probe of the company.3https://www.bloomberg.com/news/articles/2019-09-11/amazon-antitrust-probe-ftc-investigators-interview-merchants Even where Amazon’s use of third party data may be described by some as an unfair competitive edge, whether it violates competition laws is a big open question. Still, the report provides some interesting leads for the authorities.

One notable issue raised by this report is the type of data that Amazon is alleged to have used. Information about an individual seller’s sales volume and marketing expenses would be more clearly considered proprietary and thus able to confer some sort of competitive edge. But a tougher call is Amazon’s use of information about its own profits on sales made by particular third-party sellers, which Amazon is reported as having used to back into a price for its private-label products.

Another issue is where to draw the line between aggregated data (which antitrust laws typically consider to be less competitively-sensitive information) and individual seller-level data (which is considered more sensitive). An interesting example brought up in the article is where a product is sold by only a single third-party seller, in which case masking or aggregating the data would be impossible or might generate useless results.

“Whose data” it is and how much of a competitive advantage it confers should both factor into an antitrust analysis, but neither will be easy questions for the authorities to answer.

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