LONDON — For Britain, its exit from the European Union is supposed to be the start of a new era as a “Global Britain,” an open, inviting and far-reaching country. For the European Union, Brexit is an opportunity to repatriate some business from across the English Channel and further bolster the continent’s economic standing in the world.And for the City of London, a large hub for international banks, asset managers, insurance firms and hedge funds, Brexit is a political headache. Britain’s financial center has been caught in the middle of these two agendas, leaving the future of the …
LONDON — European Union regulators brought antitrust charges against Amazon on Tuesday, saying the online retail giant broke competition laws by unfairly using its size and access to data to harm smaller merchants who rely on the company to reach customers.
The European Commission, the executive branch of the 27-nation bloc, said Amazon had abused its dual role as both a retail store used by scores of vendors, and a merchant that sells its own competing goods on the platform. The authorities accused Amazon of harvesting nonpublic data from sellers who use its marketplace to spot popular products, then copy and sell them, often at a lower price.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Margrethe Vestager, the commission’s vice president for digital issues, said in a statement. “Data on the activity of third party sellers should not be used to the benefit of Amazon when it act as a competitor to these sellers.”
The case, which has been expected for months, is the latest front in a trans-Atlantic regulatory push against Amazon, Apple, Facebook and Google as the authorities in the United States and Europe take a more skeptical view of their business practices and dominance of the digital economy. Last month, the Justice Department brought antitrust charges against Google, and Apple and Facebook are also facing investigations in both Washington and Brussels.
Many in Europe will be watching to see how the Amazon announcement is received by the incoming administration of President-elect Joseph R. Biden Jr., who is expected to pursue policies that limit the industry’s power. The Trump administration has criticized Ms. Vestager for aiming at American companies like Apple, even as it initiated its own investigations of the industry.
In the Amazon case, the announcement on Tuesday is still preliminary and is just one part of the regulatory process. Amazon now has a chance to respond to the charges. It can take many months, or even years, before a fine and other penalties are announced. The commission also could reach a settlement with Amazon, or the case could be dropped.
The European Commission said it has also started a parallel investigation of Amazon policies around its “buy box,” an important piece of real estate on Amazon’s website that makes it easy for consumers to quickly click to make a purchase.
The commission is studying whether Amazon gives preferential treatment for the buy box to its own products and those of other sellers that pay to use Amazon’s logistics services.
Amazon denied any wrongdoing and said it supports thousands of businesses in Europe.
In Brussels, Amazon has been gearing up for a legal fight. It has hired a team of lawyers and economists, including several who in the past were encouraging tougher enforcement against Google and Microsoft.
“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts,” the company said in a statement. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
The case reinforces the European Union’s role as a leading tech-industry watchdog, even as past investigations of companies like Google have done little to diminish their power. Authorities in Brussels have argued that the biggest tech platforms unfairly use their power to box out competitors, though means like bundling products, charging high fees in app stores and hoarding data.
Ms. Vestager has raised alarms about the “gatekeeper” role of companies like Amazon, Apple, Facebook and Google. The companies have reached such a size, Ms. Vestager has argued, that they are essentially micro-economies, setting rules and policies with little transparency that determine the fate of millions of other businesses that have no choice but to follow along.
About 2.3 million third-party merchants around the world use Amazon to reach customers, including about 37 percent who rely on the company as their sole source of income, according to a United States congressional report published last month. In the European Union, Amazon has information on about 800,000 active sellers using its platform, covering more than 1 billion products, according to the European Commission.
Ms. Vestager has warned the biggest companies will only grow stronger without tougher antitrust enforcement and new regulations, blocking new companies and innovations from emerging.
Next month, the European Commission is expected to unveil a new package of laws that would represent one of the world’s most sweeping set of regulations of the tech industry. It could include rules prohibiting the self-preferencing of products and requiring the biggest companies to share data with smaller rivals.
In the Amazon case, European authorities spent two years investigating the company’s dual role as both a retail store and seller of its own goods.
Amazon argues that it only makes up a small sliver of the global retail market, but for many smaller merchants the company is the main gateway to online sales. Worries about Amazon’s power have only grown during the pandemic, as internet sales become increasingly vital to businesses grappling with lockdowns and lost foot traffic. Since 2015, e-commerce sales in the European Union nearly doubled to about 720 billon euros, or about $850 billion.
Sellers have long raised concerns that if Amazon sees a particular product doing well on its website, the company would create its own version, sell it at a lower price and then give it better placement on the Amazon website.
The European Commission said those concerns were supported by a review of data on more than 80 million transactions and 100 million products. Ms. Vestager said it showed how Amazon used the data from outside sellers to determine what computer accessories, kitchen tools or other products to introduce, as well as where to set prices and how to manage the inventory.
The real-time information Amazon collects includes order totals, number of visitors to certain products and a merchant’s revenue.
“This is a case about big data,” said Ms. Vestager. She said the investigation centers on Amazon’s behavior in France and Germany, where she said Amazon has a “dominant” position in the market.
Critics of Amazon cheered the European decision.
“Amazon, by using its very powerful position on e-commerce markets and its dual role as both retailer and marketplace, is making it more difficult for independent retailers to compete fairly,” said Agustin Reyna, director of legal and economic affairs at the European Consumer Organization, a group that has been urging regulators to act against Amazon.
Monika Pronczuk contributed reporting from Brussels.
On the same day that the U.S. officially withdrew from the global pact to reduce emissions that cause climate change, presidential contender Joe Biden committed that he would rejoin the Paris Agreement if elected.
In a tweet late Wednesday, Biden wrote, “Today, the Trump Administration officially left the Paris Climate Agreement. And in exactly 77 days, a Biden Administration will rejoin it.”
The Trump Administration announced that the U.S. would leave the agreement three years ago, in a move that was blasted by venture investors at the time.
“I have always believed that, while we can disagree on the scientific premise behind climate change, we should all agree that advanced energy technologies represent one of the biggest economic opportunities,” said General Catalyst managing director Hemant Taneja at the time. “To give that up is a threat to American prosperity … Our American companies will be at a huge competitive disadvantage globally if they don’t have a market to rely on in their backyard.”
Biden’s decision to rejoin the agreement should come as no surprise given the $2 trillion climate stimulus package that was a major plank of the former Vice President’s campaign.
For the Trump Administration, the official abandonment of the climate agreement was the fulfillment of a campaign promise made in what could be the waning days of its authority.
A permanent American exit from the climate accord would be a huge blow to the international community’s ability to stave off a climate disaster caused by rising temperatures related to greenhouse gas emissions. A year of wildfires, flooding and other climate-related catastrophes have shown how changing temperatures are already wreaking havoc on communities. As the second largest emitter of global carbon dioxide, the U.S. plays an outsized role in the success of any climate change mitigation plan.
The agreement, a centerpiece of the previous Obama Administration in which Biden served as vice president, was designed to limit the emissions that cause global warming so that temperatures would not rise beyond another 2 degrees celsius.
“If Biden wins, then the fact that the withdrawal became final on November 4 really won’t matter,” Todd Stern, who was the top U.S. climate negotiator during the Obama administration, told the Financial Times. “If Trump wins a second term, then it will have much more lasting impact.”
To date, the U.S. is the only country that has formally left the agreement.
Even if a Trump Administration were to eke out a slight electoral college victory and return for a second term, market dynamics could mute the effect of any fossil fuel industry advocacy or stimulus the government may try to initiate.
Simply put, renewable energy is making more economic sense within the U.S. than its fossil fuel competitors. Wind and solar are now basically cost competitive or cheaper than fossil fuels in many markets. The cost of battery storage is also falling dramatically.
A March report from Consumer Reports explained just how much better solar power can be for consumers. “Going solar is a money-saver in the long term, even though startup costs are higher for the consumer,” according to the publication. “Electricity from fossil fuels costs between 5 cents and 17 cents per kilowatt-hour. Solar energy costs average between 3 cents and 6 cents per kilowatt-hour and are trending down, according to the National Renewable Energy Laboratory.”
Beyond market forces, a recalcitrant Trump Administration could be pressured to adopt more aggressive policies to reduce its emissions by international tariffs and potential sanctions, Sarah Ladislaw, a director of the climate change program at the Center for International and Strategic Studies at Tufts University, told the Financial Times..
“It is quite likely that other countries with ambitious emissions reduction targets, like the EU and China, will try to influence US behavior through cross-border carbon tariffs and a push to influence the global financial system to incorporate climate considerations,” she said.