Amazon has breached EU antitrust rules, according to the European Commission. Yahoo Finance's Alexis Keenan weighs in.
AKIKO FUJITA: Welcome back to Yahoo Finance Live. We're watching shares of Amazon down about 3% in the session right now as the e-commerce giant faces fresh allegations of antitrust over in Europe. Alexis Keenan is here to bringing us the very latest on that front. And Alexis, you know, I was thinking back to that hearing here in the US about a month or so ago on the very concern about Amazon collecting data from third party sellers. How much of what we're hearing over in Europe is sort of a similar argument here?
ALEXIS KEENAN: OK, so this is actually quite a similar argument, at least on one of the arguments that the EU is making here. But look, the laws are different in the EU than they are in the US in terms of antitrust, and so this is how it shakes out, at least for the EU Commission. They're the ones that oversee anti-competitive behavior in the EU. They have notified Amazon that the agency has a preliminary view that Amazon is using Amazon.com in order to what they say is distort competition.
Now, the claim is that Amazon takes private data from third party sellers and then uses that data against the companies in order to promote its own brand of products, the Amazon brand products, over those third parties. Now, there's also a second EU probe that the Commission said it's launching, and that is questioning whether Amazon gives different advantages, and those are to sellers that use its logistics and delivery services, so in essence, saying that the sellers who do elect to use those services will get Amazon's Buy Box, for example, that gives them preferential treatment in terms of converting to a sale and also potentially preferences for listing the item on Amazon Prime for Prime delivery.
Now, this notice though, this is really serving right now as an intermediary step, and what it does is it gives the chance to Amazon to really open up a conversation with the Commission before it makes a final ruling. And now, those final rulings and final orders, they can come with mandates that the company change its behavior, also can come with really steep fines. Fines here a can go up to 10% of Amazon's global revenue. And for 2019, that was $28 billion.
Now, as for Amazon's part, it can choose to react in a few different ways. They could say, hey, we have no violations here. We don't agree with you, Commission. In which case, the Commission can either go ahead and issue its final order, or it could still close the investigation and say, OK, we agree with you, no harm, no foul here. Though experts I've talked to have said that that's probably quite unlikely. Also, Amazon could say, we don't want to admit fault here, but they could start to negotiate a change in their behavior, and so they could say, we will change the way we use this data with respect to third parties, we'll change us behavior for the Buy Box, those types of negotiations.
So either way though, Amazon has a right to request a hearing, which I'm told they will likely do. The Commission says that Amazon is expected to respond in quote, "the coming weeks." Either way though, they did release a statement, Amazon did, saying that they really disagree with these preliminary assertions of the Commission, Akiko.
AKIKO FUJITA: OK, we'll be watching for that response and how Amazon moves forward, especially on a lot of these regulatory hurdles. Alexis Keenan, thanks so much.