European Commission is charging Amazon with Anti-trust practices. And if found guilty, they might have to pay a fine of $28 billion - around 10% of its annual global revenue.

So, what's the issue all about?

Amazon is a marketplace-a platform where sellers & buyers can access each other. And it’s a boon for sellers who use its services to access a huge online market with minimal investment. But the problem is, Amazon also sells goods on the platform and it’s hardly a fair competitor

Amazon has lots of consumer insights. They know what products customers search for, what features attract them the most, and the best way to target them. This kind of data is invaluable when it comes to making offers people can’t refuse, and small sellers can’t hope to match it.

And then there’s the data that Amazon collects from the sellers themselves. Any merchant that wants to sell on the e-commerce site has to agree to share certain data with them- like what products they are selling, how much the vendor has in stock, etc.

EU officials have been talking to such sellers for the past year, and they’ve concluded that Amazon has been using "competitively sensitive information" to choose profitable products and launch similar offerings, without actually having to figure out what customers like to buy.

With such info, Amazon can decide how much to sell an item for, which features to copy and expected sales volume

And, many sellers have claimed that if a product of theirs does well, Amazon introduces a similar one at a lower price, giving it a more prominent listing on the site

Of course, Amazon has stoutly refuted this. The company maintains that it uses individual sellers’ data only to support them and deliver better customer experiences.

A WSJ investigation found that though Amazon does restrict its private-label executives from accessing data from individual sellers, these rules aren’t strictly enforced. And in fact, using such data is a routine practice in the company. And it is definitely anti-competitive.

Anyway, a verdict on whether Amazon broke competition rules is expected to be reached next year.

What do you think? Is Amazon guilty?

Read more in today's Finshots Brief- https://finshots.in/brief/on-amazon-and-mobile-money/