Exclusive: Key EU lawmaker's plan to rein in online marketplaces a threat to Amazon

0
© Reuters. FILE PHOTO: Amazon's logo at its logistics centre in Boves, France© Reuters. FILE PHOTO: Amazon’s logo at its logistics centre in Boves, France

By Foo Yun Chee

BRUSSELS (Reuters) – Amazon (NASDAQ:) could face a threat other than just EU antitrust scrutiny after a key EU lawmaker announced proposals aimed at curbing online marketplaces’ use of merchants’ data to boost sales of own brand products.

Seeking to ensure a level playing field between tech giants such as Google (NASDAQ:), Amazon and Apple (NASDAQ:) and traditional businesses, the European Commission in April outlined draft rules to prevent unfair business practices.

The proposal specifically targets app stores, search engines, e-commerce sites and hotel booking websites.

European Parliament lawmakers, whose approval is needed to ensure the proposal becomes legislation and under pressure to be seen as consumer-friendly ahead of elections in May, have since come up with about 680 amendments to beef up the draft.

Key among these is the one proposed last week by Danish center-left lawmaker Christel Schaldemose, the lead parliament negotiator, which takes aim at a case her compatriot, European Competition Commissioner Margrethe Vestager, is looking into.

Schaldemose has proposed setting up Chinese walls between subsidiaries, according to a draft seen by Reuters. She aims to get her committee to vote on the amendments on Dec. 6.

Vestager last month said she was gathering information on whether Amazon uses merchants’ data in a way that hurts competition. Her power lies in her ability to impose fines while Schaldemose’s proposal, if accepted, would be more far-reaching as it would apply to all companies regardless of their market power.

In her amendment, Schaldemose referred to investigations by antitrust regulators in the European Union and elsewhere into online intermediation services’ dual role as a marketplace and as a rival on the same platform.

“To ensure fairness, the provider of the online intermediation service should not be allowed to disclose the data generated by the transactions of a business user to third parties for commercial purposes, including within their own corporate structure, without the consent of the business user,” the draft said.

Lawmakers also want the rules to cover voice assistance services or virtual helpers such as Amazon’s Alexa, Apple’s Siri and Google Assistant because of their increasing popularity.

After the committee vote, Schaldemose would then seek approval at the assembly a week later. EU lawmakers would then need to thrash out a common position with the Commission and EU countries before the proposals become law.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.