Amazon, EU Reach Settlement Over Marketplace Seller Data

In a settlement with the European Union, Amazon.com on Tuesday agreed to make changes to how it does business, promising to address allegations that it was using independent sellers' data to its advantage. The European Commission, the E.U.'s executive arm, said in a news release on Tuesday that Amazon would stop using nonpublic information it gathers about independent customers to inform Amazon’s own product choices.

The settlement helps Amazon avoid a multibillion-dollar fine, The New York Times reported. The commission first opened an investigation into Amazon's use of nonpublic data of its marketplace sellers in July 2019. In November 2020, it concluded that Amazon was distorting fair competition on its platform and preventing effective competition by using that data to calibrate its retail agreements.

Amazon said in a statement to CNBC that while the company continues to disagree with several of the preliminary conclusions the European Commission made, "We have engaged constructively to ensure that we can continue to serve customers across Europe and support the 225,000 European small and medium sized businesses selling through our stores."

Total Retail's Take: If Amazon breaches the agreement it made with the E.U., the online retail giant will be subject to a fine of 10 percent of its total annual turnover, or a periodic penalty of 5 percent per day of daily turnover for each day of noncompliance. This marks a victory for the E.U., which has been trying to crack down on the American e-commerce giant that has dominated online shopping in Europe. The E.U.'s Digital Markets Act, passed in March, aims to curb market power on companies with a strong presence on the internet economy.