EU Hits Amazon With Antitrust Charges, Accusing It of Predatory Behavior Against Small Businesses
- The executive branch of the European Union laid out its first set of antitrust charges against Amazon on Tuesday in an investigation related to the company’s dual role as both a retailer and a merchant on its website.
- Specifically, the EU is accusing Amazon of abusing that role. It claims that Amazon utilizes seller data from other vendors in order to determine which products it can replicate at cheaper prices.
- The EU also launched a separate investigation into Amazon’s “buy boxes,” accusing the tech giant of preferentially listing its own products, as well as products from sellers that pay to use Amazon’s logistics services.
- The EU joins a growing list of governments addressing antitrust concerns among big tech companies. On Monday, India launched an investigation into whether Google unfairly promoted its payment app on Google Play, the Android app store.
EU Files Antitrust Charges Against Amazon
In a preliminary set of charges filed on Tuesday, the European Union accused tech giant Amazon of violating antitrust laws.
In those charges, the European Commission — the EU’s executive branch — accused Amazon of abusing its dual role as both a retailer and a merchant. By being both a retailer and merchant, Amazon hosts thousands of vendors on its website, allowing them a place to sell their products, while at the same time selling its own products there.
The background related to these charges is a frequent target of controversy surrounding Amazon.
Many small businesses will sell their products on Amazon largely because it’s become such a dominant force in online retail. For example, a shopper is much more likely to find a business on Amazon than they are to find and then also go to that business’s website.
However, Amazon has long been accused of replicating products that sell well on the website, oftentimes then selling those similar products for much cheaper. Moves like that can severely damage small businesses that don’t have the same level of resources Amazon does. It also means smaller companies are left in a “damned if I do, damned if I don’t” situation, having to decide between relying on the exposure that Amazon brings to grow a business and potentially having those ideas ripped off by Amazon.
That’s where the European Commission’s come in. According to the Commission — which reviewed data from more than 80 million transactions and 100 million products on Amazon in France and Germany, the EU’s two largest markets — the company is routinely integrating non-public seller data from other vendors into its own retail algorithms.
Essentially, if true, that would mean Amazon is looking at metrics such as the number of a certain product sold by independent vendors on Amazon, as well as how much money those vendors have made from each product. That information, which isn’t able to be accessed by other vendors on Amazon, would then allow Amazon to determine which new products it should roll out and how much it should charge for them.
“We do not take issue with the success of Amazon or its size,” European Commission top antitrust official Margrethe Vestager said. “Our concern is the very specific business conduct that appears to distort competition.”
“Data on the activity of third party sellers should not be used to the benefit of Amazon when it act[s] as a competitor to these sellers,” she added.
Second Investigation: Amazon Distorts “Buy Boxes”
Alongside those charges, the Commission has also announced that it’s started a separate investigation into Amazon’s policies around its “buy box.”
That’s the sidebar on Amazon that allows customers to add items to their cart with one click; however, the caveat is that the buy box only lists a single vendor. To view other, less-prominently displayed vendors, customers would need scroll down.
As Vestager explains it, “The Buy Box is essential. It prominently shows you offers for one single seller of a chosen product with the possibility for the consumer to purchase it directly. So winning the Buy Box is crucial for the marketplace sellers as it seems that more than 80% of all transactions on Amazon are channelled through it.”
Regarding this investigation, the Commission is specifically looking into whether Amazon uses the buy box to preferentially list its own products and/or products from sellers that pay to use its logistics services.
“Our concern is that Amazon may artificially push retails to use its own related services,” which “may potentially lock them deeper into Amazon’s own ecosystem,” Vestager said.
Amazon Rebukes EU Findings
Naturally, Amazon has denied the Commission’s charges.
“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” a spokesperson said.
As for where things go from here, it’s unclear, but this is likely going to be a very slow process. For one, these charges are just preliminary. The Commission actually needs to finish its investigation first. That means it could take months — or more likely, years — before a fine or other penalties are announced.
It’s also possible these charges could be dropped if the Commission reaches a settlement with Amazon; however, if the Commission does agree that Amazon violated EU competition law, Amazon could face fines up to 10% of its annual worldwide turnover, which would amount to a maximum of $37 billion.
Next month, the Commission is expected to unveil a new package of laws in what could be one of the sweeping set of regulations on the tech industry ever. Notably, that could include rules restricting self-preferential treatment and requiring massive companies like Amazon to share data with smaller rivals.
But it’s not just Europe. On Monday, India opened an antitrust case against Google over allegations that it unfairly promotes Google Pay on Google Play, the app store for Android phones.
Just last month in the U.S., Congress also took aim at big tech companies. In fact, a House Judiciary subcommittee accused Apple, Amazon, Facebook, and Google of engaging in anti-competitive monopoly tactics.
“By controlling access to markets, these giants can pick winners and losers throughout our economy. They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them,” the report said, hitting a very similar note to that of the European Commission.
See what others are saying: (CNN Business) (The New York Times) (Tech Crunch)
Schools Across the U.S. Cancel Classes Friday Over Unverified TikTok Threat
Officials in multiple states said they haven’t found any credible threats but are taking additional precautions out of an abundance of safety.
Schools in no fewer than 10 states either canceled classes or increased their police presence on Friday after a series of TikToks warned of imminent shooting and bombs threats.
Despite that, officials said they found little evidence to suggest the threats are credible. It’s possible no real threat was actually ever made as it’s unclear if the supposed threats originated on TikTok, another social media platform, or elsewhere.
“We handle even rumored threats with utmost seriousness, which is why we’re working with law enforcement to look into warnings about potential violence at schools even though we have not found evidence of such threats originating or spreading via TikTok,” TikTok’s Communications team tweeted Thursday afternoon.
Still, given the uptick of school shootings in the U.S. in recent years, many school districts across the country decided to respond to the rumors. According to The Verge, some districts in California, Minnesota, Missouri, and Texas shut down Friday.
“Based on law enforcement interviews, Little Falls Community Schools was specifically identified in a TikTok post related to this threat,” one school district in Minnesota said in a letter Thursday. “In conversations with local law enforcement, the origins of this threat remain unknown. Therefore, school throughout the district is canceled tomorrow, Friday, December 17.”
In Gilroy, California, one high school that closed its doors Friday said it would reschedule final exams that were expected to take place the same day to January.
According to the Associated Press, several other districts in Arizona, Connecticut, Illinois, Montana, New York, and Pennsylvania stationed more police officers at their schools Friday.
Viral Misinformation or Legitimate Warnings?
As The Verge notes, “The reports of threats on TikTok may be self-perpetuating.”
For example, many of the videos online may have been created in response to initial warnings as more people hopped onto the trend. Amid school cancellations, videos have continued to sprout up — many awash with both rumors and factual information.
“I’m scared off my ass, what do I do???” one TikTok user said in a now-deleted video, according to People.
“The post is vague and not directed at a specific school, and is circulating around school districts across the country,” Chicago Public Schools said in a letter, though it did not identify any specific post. “Please do not re-share any suspicious or concerning posts on social media.”
According to Dr. Amy Klinger, the director of programs for the nonprofit Educator’s School Safety Network, “This is not 2021 phenomenon.”
Instead, she told The Today Show that her network has been tracking school shooting threats since 2013, and she noted that in recent years, they’ve become more prominent on social media.
“It’s not just somebody in a classroom of 15 people hearing someone make a threat,” she said. “It’s 15,000 people on social media, because it gets passed around and it becomes larger and larger and larger.”
See what others are saying: (The Verge) (Associated Press) (People)
Jake Paul Says He “Can’t Get Cancelled” as a Boxer
The controversial YouTuber opened up about what it has been like to go from online fame to professional boxing.
The New Yorker Profiles Jake Paul
YouTuber and boxer Jake Paul talked about his career switch, reputation, and cancel culture in a profile published Monday in The New Yorker.
While Paul rose to fame as the Internet’s troublemaker, he now spends most of his time in the ring. He told the outlet that one difference between YouTube and boxing is that his often controversial reputation lends better to his new career.
“One thing that is great about being a fighter is, like, you can’t get cancelled,” Paul said. The profile noted that the sport often rewards and even encourages some degree of bad behavior.
“I’m not a saint,” Paul later continued. “I’m also not a bad guy, but I can very easily play the role.”
Paul also said the other difference between his time online and his time in boxing is the level of work. While he says he trains hard, he confessed that there was something more challenging about making regular YouTube content.
“Being an influencer was almost harder than being a boxer,” he told The New Yorker. “You wake up in the morning and you’re, like, Damn, I have to create fifteen minutes of amazing content, and I have twelve hours of sunlight.”
Jake Paul Vs. Tommy Fury
The New Yorker profile came just after it was announced over the weekend Paul will be fighting boxer Tommy Fury in an 8-round cruiserweight fight on Showtime in December.
“It’s time to kiss ur last name and ur family’s boxing legacy goodbye,” Paul tweeted. “DEC 18th I’m changing this wankers name to Tommy Fumbles and celebrating with Tom Brady.”
Both Paul and Fury are undefeated, according to ESPN. Like Paul, Fury has found fame outside of the sport. He has become a reality TV star in the U.K. after appearing on the hit show “Love Island.”
See what others are saying: (The New Yorker) (Dexerto) (ESPN)
Hackers Hit Twitch Again, This Time Replacing Backgrounds With Image of Jeff Bezos
The hack appears to be a form of trolling, though it’s possible that the infiltrators were able to uncover a security flaw while reviewing Twitch’s newly-leaked source code.
Hackers targeted Twitch for a second time this week, but rather than leaking sensitive information, the infiltrators chose to deface the platform on Friday by swapping multiple background images with a photo of former Amazon CEO Jeff Bezos.
According to those who saw the replaced images firsthand, the hack appears to have mostly — and possibly only — affected game directory headers. Though the incident appears to be nothing more than a surface-level prank, as Amazon owns Twitch, it could potentially signal greater security flaws.
For example, it’s possible the hackers could have used leaked internal security data from earlier this week to discover a network vulnerability and sneak into the platform.
The latest jab at the platforms came after Twitch assured its users it has seen “no indication” that their login credentials were stolen during the first hack. Still, concerns have remained regarding the potential for others to now spot cracks in Twitch’s security systems.
It’s also possible the Bezos hack resulted from what’s known as “cache poisoning,” which, in this case, would refer to a more limited form of hacking that allowed the infiltrators to manipulate similar images all at once. If true, the hackers likely would not have been able to access Twitch’s back end.
The photo changes only lasted several hours before being returned to their previous conditions.
First Twitch Hack
Despite suspicions and concerns, it’s unclear whether the Bezos hack is related to the major leak of Twitch’s internal data that was posted to 4chan on Wednesday.
That leak exposed Twitch’s full source code — including its security tools — as well as data on how much Twitch has individually paid every single streamer on the platform since August 2019.
It also revealed Amazon’s at least partially developed plans for a cloud-based gaming library, codenamed Vapor, which would directly compete with the massively popular library known as Steam.
Even though Twitch has said its login credentials appear to be secure, it announced Thursday that it has reset all stream keys “out of an abundance of caution.” Users are still being urged to change their passwords and update or implement two-factor authentication if they haven’t already.