COVID-19 has highlighted Amazon’s crucial role in delivering critical supplies, but it has also brought attention to ecommerce giant’s competitive conduct into the spotlight, says GlobalData, a leading data and analytics company.
It has been claimed that Amazon’s algorithms were favouring certain own-brand products over those from third-party sellers, Laura Petrone, Senior Analyst at GlobalData, comments: “The prioritization of critical products for storage and shipping during COVID-19 would risk undermining small businesses. The pandemic has revealed the flaws of a business model that forces third-party resellers to rely on Amazon’s platform, with no real alternatives available.”
Amazon is no stranger to allegations that it has abused its market power. For years, some third-party sellers and regulators have accused the company of unfairly favouring its own products on its online retail platform, a claim Amazon has always denied. Even before the crisis, the US Federal Trade Commission, the European Commission, and the Competition Commission of India had opened probes into Amazon’s competitive conduct. These regulators will now be able to call upon new data and potentially new evidence of the tech giant’s abuses of power.
Petrone concludes: “COVID-19 is likely to reinvigorate the debate around competition in the digital era, particularly when it comes to defining market power and anti-competitive practices. Existing rules struggle to keep up with the challenges of the digital economy, where tech giants thrive thanks to their large, established customer network and low-cost capital”.
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