Why is Amazon Charged for Dominance in Online Shopping in Germany and France?

 The comfort level you get while shopping online cannot be matched to the one you get while you shop from physical stores. In online shopping, you get to choose from a variety of products and that too in a single platform. Now, due to the pandemic coronavirus, more number of people have been dependent on online shopping. This has worked well for many eCommerce sites and they are now growing at a tremendous rate. 

Germany is a highly-populated country where most people prefer online shopping. There are a lot of online eCommerce stores that rank the best overall. The top three eCommerce sites are always the same. They are amazon.de, otto.de, and zalando.de. The next two places are occupied by mediamarkt.de and notebooksbilliger.de. 

It is known that the U.S. Company --- Amazon --- uses its size, power, and data to get a biased advantage on smaller merchants selling their products on its online platform. This has led the European Union to charge Amazon for damaging retail competition. The allegations against Amazon were charged on Tuesday. 

This move has been initiated by the chief Margrethe Vestager, the latest European salvo, and it is typically against the U.S. tech giant. The action has particularly begun in the time of the COVID-19 pandemic, where Amazon has played a major role in withstanding the downfall of the global economy. 

The Commission of Europe is now investigating Amazon's position both as a marketplace for merchants and a rival seller. The company is also analyzed by the United States on its continuous mistreatment of sellers and its dual role.

While checking how Amazon collects data on competitors that provide everything from electronics to kitchenware, Amazon uses the sensitive info to get a better target for its own products. With the help of the data, Amazon focuses on the sale of best-selling products. 

A U.S. Congressional antitrust report asserted that Amazon unfairly uses its market power and it has also raised concerns over the European Union’s move.

David Cicilline, the U.S. Representative, a Democrat, and the top antitrust lawmaker in the House, encouraged the EU and motivated the U.S. Federal Trade Commission to take legal action. As part of a 16-month bipartisan investigation, the company has single market power over sellers on the company's platform, Cicilline said.

The EU’s charges show how companies are led by Europe and the challenges in regulating companies that have achieved dominance after analyzing their user data.

According to Vestager, the EU has charged large fines on Google and other companies as well. The Union will take a final decision in the coming year. Amazon has now been charged a penalty of up to 10% of its global turnover if it accepts the fault of violating antitrust rules. 

Since July last year, the EU competition enforcer has been monitoring Amazon after the rival traders have raised their voices against their losses. Therefore, charges were enforced on Amazon's activities in France and Germany. These are the two places where Amazon has a huge market in Europe.

The case mainly concentrates on the use of merchant data on Amazon's platform. Vestager said her officials have entirely looked into 80 million transactions and reviewed more than 100 million products on Amazon's platform to put the case together.

In addition to this, the European Commission has also opened a new investigation into Amazon on Tuesday over the required treatment of its own retail offers. It also focuses on investigating those places where Amazon uses its logistics and delivery services. According to the situation, a physical investigation will be done.

Regulators will verify the standards of the company the same way they used to select winners of its ''buy box.'' This will help customers to add items from a retailer directly into their shopping carts. Its rules should not favor Amazon's retail offers or advantages in any way, Vestager said.