Connect with us


Europe lays out antitrust case against Amazon’s use of big data



The European Commission has laid out a first set of antitrust charges against Amazon focused on its dual role as a platform for other sellers but also a retailer itself on its own platform — and its cumulative use of third party merchant data to underpin Amazon’s own retail decisions.

Competition chief Margrethe Vestager said its preliminary conclusion is the ecommerce giant has abused its market position in France and Germany, its biggest markets in the EU, via its use of big data to “illegally distort” competition into online retail markets.

“We do not take issue with the success of Amazon. Or its size. Our concern is very specific business conduct which appears to distort genuine competition,” she said at a press conference announcing the formal charges.

The action stems from a 2015 sectoral ecommerce enquiry carried out by the bloc’s competition division. The Commission subsequently announced a formal investigation of Amazon’s use of data from sellers on its platform in July last year, though it had begun looking into concerns about whether third party sellers were being placed at a data-disadvantage by the ecommerce giant as far back as 2018.

As part of the investigation, EU regulators obtained a massive data set from Amazon — covering over 80M transactions and more than 100M product listings on its European marketplaces — to analyse how its business uses merchant data.

“Amazon is data driven. It’s a highly automated company — where business decisions are based on algorithmic tools,” said Vestager. “Our investigation shows that very granular, real-time business data relating to third party sellers’ listings and transactions on the Amazon platform systematically feed into the algorithm of Amazon’s retail business. It is based on these algorithms that Amazon decides what new products to launch, the price of each individual offer, the management of inventories, and the choice of the best supplier for a product.”

The competition chief said its preliminary concern is thus that third party sellers are unable to compete on the merits as a result of the big data advantage Amazon gleans from its access to third party sellers’ data.

“Amazon has, for example, access to data on the number of ordered and shipped units of sellers’ products, revenues on the marketplace, the number of visits to sellers’ offers, information relating to shipping — including the past performance of the seller, the consumers’ claims on the sellers’ products including the activated guarantees. And Amazon gets this data from every seller, every listed product, every purchase on its platform,” she said. “Our concern is not about Amazon retail — about the insights that Amazon retail has into the sensitive business data of one particular seller. Rather they are about the insights that Amazon retail has about the accumulated business data of more than 800,000 active sellers in the European Union covering more than 1BN products.

“In other words this is a case about big data.”

Vestager said the investigation has shown Amazon is able to aggregate and combine individual seller data in real time and to draw what she described as “precise and targeted” conclusions from it.

That capability gives is a huge advantage over individual sellers on its platform who do not have access to the same level of big data to help their business decisions, is the contention.

“Many retailers will have to invest heavily to identify products of interest and bring them to the consumers — taking risks when they invest in new products or when choosing a specific price level. Our concern is that Amazon can avoid some of those risks by using the data that it has access to,” added Vestager.

Reached for comment on the charges, an Amazon spokesperson sent this statement:

We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts. Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate. No company cares more about small businesses or has done more to support them over the past two decades than Amazon. There are more than 150,000 European businesses selling through our stores that generate tens of billions of Euros in revenues annually and have created hundreds of thousands of jobs.

Amazon will now have a chance to respond to the charges, after which the Commission will assess the evidence and take a decision on whether it believes there has been an infringement of EU competition law. If it believes there has it has the power to order an end to infringing conduct and impose a fine of up to 10% of a company’s annual worldwide turnover.

In the two markets EU regulators found Amazon to be dominant, with more than 70% of consumers in France and more than 80% in Germany who made online purchases bought something from Amazon in the last 12 months.

Vestager specified the Commission is defining the market as “platforms providing marketplace services” rather than more general retail.

Also today, the commissioner announced a second competition investigation into Amazon — this one focused on the Buy Box and Prime loyalty program. Vestager said regulators decided to split the Amazon cases so an ongoing investigation into the Buy Box and Prime doesn’t slow down progress on the big data probe.

Detailing the concerns around Buy Box and Prime she said: “Looking into Amazon’s data use revealed that Amazon may have set certain rules on its platform that artificially favors both its own retail offers as well as the offers of sellers that use Amazon’s logistics and delivery services. For this reason we have decided to open a second investigation into these business practices.”

The Buy Box appears on Amazon product listing pages — letting Amazon users click to add a product directly to their shopping cart. This means the choice of seller for the product which appears in the box is a key detail.

“The Buy Box is essential,” said Vestager. “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.”

She also said it’s “of the essence” for retailers to be able to sell their products under Amazon’s Prime label.

“Amazon’s Prime consumers are very important to sellers — not only because they’re a constantly increasing number but also because Prime consumers spend significantly more on Amazon than others would do.”

“Our concern is that Amazon may artificially push retails to use its own related services,” she added — pointing to its logistics and delivery arms — which she said “may potentially lock them deeper into Amazon’s own ecosystem”.

Regulators will therefore be looking into “the potential effects” of the rules set by Amazon for the Buy Box and for Prime. “We want to make sure that sellers that do not use the Amazon logistic and delivery program also have a chance to compete on the merits on Amazon’s platform. We also want to make sure that retailers can shift to competing marketplaces without being locked into the Amazon ecosystem.”

While European regulators move forward with antitrust action related to Amazon’s marketplace practices, the ecommerce giant is also in the antitrust crosshairs of US lawmakers.

Last month it was one of a number of tech giants called out in an antitrust report by the U.S. House Judiciary Committee. The report argues Amazon wields monopoly power over SMEs via its dominance of online retail — which in turn enables it to “self-preference and disadvantage competitors in ways that undermine free and fair competition”.

Amazon’s response to the US committee’s scrutiny was a fierce rebuttal — saying it accounts for only a tiny fraction of global retail and isn’t even the largest US retailer by revenues. It also claimed its interests align with the third party sellers on its platform, denying there’s any conflict of interests.

This story is developing — refresh for updates…

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

Continue Reading


Adobe expands customer data platform to include B2B sales



The concept of the customer data platform (CDP) is a relatively new one. Up until now, it has focused primarily on pulling data about an individual consumer from a variety of channels into a super record, where in theory you can serve more meaningful content and deliver more customized experiences based on all this detailed knowledge. Adobe announced its intention today to create such a product for business to business (B2B) customers, a key market where this kind of data consolidation had been missing.

Indeed Brian Glover, Adobe’s director of product marketing for Marketo Engage, who has been put in charge of this product, says that these kinds of sales are much more complex and B2B sales and marketing teams are clamoring for a CDP.

“We have spent the last couple of years integrating Marketo Engage across Adobe Experience Cloud, and now what we’re doing is building out the next generation of new and complimentary B2B offerings on the Experience platform, the first of which is the B2B CDP offering,” Glover told me.

He says that they face unique challenges adapting CDP for B2B sales because they typically involve buying groups, meaning you need to customize your messages for different people depending on their role in the process.

An individual consumer usually knows what they want and you can prod them to make a decision and complete the purchase, but a B2B sale is usually longer and more complex involving different levels of procurement. For example, in a technology sale, it may involve the CIO, a group, division or department who will be using the tech, the finance department, legal and others. There may be an RFP and the sales cycle may span months or even years.

Adobe believes this kind of sale should still be able to use the same customized messaging approach you use in an individual sale, perhaps even more so because of the inherent complexity in the process. Yet B2B marketers face the same issues as their B2C counterparts when it comes to having data spread across an organization.

“In B2B that complexity of buying groups and accounts just adds another level to the data management problem because ultimately you need to be able to connect to your customer people data, but you also need to be able to connect the account data too and be able to [bring] the two together,” Glover explained.

By building a more complete picture of each individual in the buying cycle, you can, as Glover puts it, begin to put the bread crumbs together for the entire account. He believes that a CRM isn’t built for this kind of complexity and it requires a specialty tool like a CDP built to support B2B sales and marketing.

Adobe is working with early customers on the product and expects to go into beta before the end of next month with GA some time in the first half of next year.

Continue Reading


Two-year-old Day One Ventures raises new $52.5M fund to invest in Valley startups



Back in 2018 Day One Ventures launched in Silicon Valley specifically designed to be both a VC and an investor that would also lead marketing and communications for its portfolio. Two years on, Day One has invested in numerous startups to do just that and has today filed with the SEC its new $52.5M fund.

The new fund is similar to the first one: investing across industries from pre-seed to seed, with occasional series A investments (from $100K to $5M).

The fund was founded and is headed by Russian émigré Masha Drokova, who, since arriving in the US a few years ago, has been variously a PR and angel investor, but famously dumped her former life in Russia as a politician and TV reporter.

Drokova says the fund focuses on ‘day one’ companies, as defined by Jeff Bezos, which have ‘customer obsession’ in-built into their company culture.

She says the fund was raised during the pandemic over zoom with $45 million coming from LPs in the first fund. More than 30% of the capital is invested in POC founders; it has 25 female founders in its portfolio; and 33% of its capital is invested in high-growth ‘impact’ companies. Day one has frequently co-invested with Andreessen, Index Ventures, Founders Fund, and Lightspeed.

The fund has had three exits so far: Lvl5, Acquired, Feastly and has invested in (with Index and Sequoia).

So far among its portfolio is:

DoNotPay: British founder Joshua Browder, started a chatbot that pays your parking ticket, cancels subscriptions and gets refunds for you. This raised a $15M series A led by Coatue and Andreessen.
Superhuman: An AI-based email client for execs founded by Brit Rahul Vohra – it has raised $35M series B from Andreessen.
MSCHF: This creates viral and controversial products on a Supreme-drop-like model, invested with Founders Fund.
Truebill: a personal finance & savings app.

The fund says its portfolio companies have now raised $825 million in aggregate; over 25% of its capital is in fintech companies; over 30% in AI-powered startups; and it claims to have hit over 500 media publications for its portfolio.

Speaking to TechCrunch, Drakova said “We choose startups with ‘customer obsession’ as the main focus for selection. Secondly, our value add in communications means we have people like Jack Randall who did comms for Robin Hood on our team. Not many women immigrants to the US have raised as much as this, as fast as this. So it’s a good sign for the market.”

Continue Reading


India bans another 43 Chinese apps



India is not done banning Chinese apps. The world’s second largest internet market, which has banned over 175 apps with links to the neighboring nation in recent months, said on Tuesday it was banning an additional 43 such apps.

Like with the previous orders, India cited cybersecurity concerns to block these apps. “This action was taken based on the inputs regarding these apps for engaging in activities which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order,” said India’s IT Ministry in a statement.

The ministry said it issued the order of blocking these apps “based on the comprehensive reports received from Indian Cyber Crime Coordination Center, Ministry of Home Affairs.”

The apps that have been banned include popular short video service Snack Video, which had surged to the top of the chart in recent months, as well as e-commerce app AliExpress, delivery app Lalamove, and shopping app Taobao Live. Full list here. At this point, there doesn’t appear to be any Chinese app left in the top 500 apps used in India.

Tuesday order comes as a handful of apps including PUBG Mobile and TikTok explore ways to make a return to the country. In recent weeks, PUBG has registered a local entity in India, partnered with Microsoft for computing needs, and publicly vowed to invest $100 million in the country. Though it is yet to hear from the government.

Tensions between the world’s two most populous nations escalated after more than 20 Indian soldiers were killed in a military clash in the Himalayas in June. Ever since, “Boycott China” sentiment has trended on social media in India as a growing number of people post videos demonstrating destruction of Chinese-made smartphones, TVs and other products.

In April, India also made a change to its foreign investment policy that requires Chinese investors — who have ploughed billions of dollars into Indian startups in recent years — to take approval from New Delhi before they could write new checks to Indian firms. The move has significantly reduced Chinese investors’ presence in Indian startups’ deal flows in the months since.

More to follow…

Continue Reading