Amazon apparently prevents advertisements from competitors so that they can only sell their products under more difficult conditions. Fair competition looks different. So what consequences can this behavior have for the e-commerce giant?
Fair competition and Amazon apparently do not make a good couple. At least the e-commerce giant seems to want to put other competitors at a disadvantage time and again.
In late July 2020, the US Congress even accused the company of abusing its market power. And the Wall Street Journal now confirms this accusation with a new research.
Fair competition: How exactly does Amazon prevent it?
According to the report, editors have found out that Amazon apparently prevents ads from competitors and restricts their placement.
Manufacturers of devices that compete directly with Amazon’s products are particularly affected. This would mean that the company is deliberately abusing its market power to distort competition.
Specifically, the provider of the streaming hardware Roku should not be able to advertise its products in some areas. The assumption: Amazon does not want to offer the competition advertising space for its own streaming media adapter Fire TV.
On the search result pages Roku is to be able to book only limited paid advertisement.
Amazon defends itself against the accusations
Amazon itself of course defends itself against these accusations. According to the e-commerce giant, however, it is quite possible that some keywords related to Amazon products are only available for advertisements to a limited extent.
The company also told CNBC that it is not unusual not to advertise or sell competing products. The US retail chain Walmart operates similarly. It does not sell Kindle e-book readers, fire TV or echo devices.
Fair competition: What are the consequences of Amazon’s behavior?
The reprehensible thing is that Amazon deliberately presents itself as a platform for other providers. So the company should not actually abuse its power to keep other competitors small.
From Amazon’s point of view, however, the behavior is quite understandable from a purely economic perspective. If the case is viewed from a moral point of view, of course, different results would be obtained.
Amazon puts its own products in the foreground. However, it was to be expected that a competitor would notice this sooner or later. The same applies to the reaction to Amazon’s behavior.
In addition, a subcommittee of the House of Representatives in the USA, which specializes in antitrust law, also investigated whether Amazon misused third-party data to develop its own products. So Amazon seems to want to consciously profit from competitors.