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Amazon To Face EU Antitrust Charges: Report

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Amazon To Face EU Antitrust Charges: Report

European Union is set to file formal antitrust charges against Amazon.com, Inc (NASDAQ: AMZN) on Tuesday, the Financial Times reports.

What Happened: European competition commissioner Margrethe Vestager will announce charges against the e-tailer on Tuesday over how it uses merchant data on its platform.

The investigators have been examining for about two years if the Seattle-based company violated the bloc's rules by being both a marketplace and a seller at the marketplace at the same time. Amazon allegedly gathers data from customers and vendors to develop and sell its products.

In the U.S., Amazon is a part of a group of companies under probe by the FTC and Department of Justice for antitrust violations.

Why It Matters: Though Amazon has declined to comment, it has played down the antitrust charges in the past, noting that many retailers have their private-label offerings, and online retail is only a small part of the overall retail sector, F.T. reports.

A report says that the U.S. is unlikely to copy E.U.'s antitrust charges because of the differences in the antitrust laws in the U.S. and E.U.

A U.S. attorney, Donald I. Baker, said that the U.S. antitrust law gives dominant companies far more latitude in managing their positions in the market. Under the domestic law, market dominance "still doesn't stop you from doing bad things," he added.

Wall Street Journal reports that the commission can force Amazon to alter its business practices and fine it as much as 10% of its annual global revenue. The penalty could go up to $28 billion based on the company's 2019 annual revenue.

Amazon can challenge such a decision in E.U. court.

Price Action: AMZN shares are trading lower by 2.22% to $3,074 in the pre-market session on the last check Tuesday.

 

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