Amazon is in some really, really hot water in the European Union.
The EU's European Commission announced on Wednesday that it's launching an antitrust investigation into Amazon to determine whether the company is using data from independent retailers who sell on its platform to hurt competition. Specifically, the EU is concerned that Amazon is choosing which retailers "win the 'Buy Box," or actually sell products to consumers.
An investigation, of course, does not in any way suggest that Amazon is guilty. But if the European Commission finds Amazon in violation of its antitrust rules, the company could face well into the billions of dollars, if the fine is levied on its revenue in Europe.
Other tech giants, including Apple, Alphabet, and Microsoft have also faced scrutiny in the EU over their business and tax practices. In some cases, they've paid billions in fines.
The investigation might be of special interest to small and medium-sized businesses that sell products online. Amazon is obviously the giant in the e-commerce market and companies have taken two distinct tacks in response. In one case, companies choose to operate their own online stores in hopes of attracting shoppers. In another, they go to Amazon to sell their products through its online marketplace.
Of course, getting noticed in either direction can be difficult, which is why Amazon now sells advertising on its service to help companies surface their products above others. Indeed, when selling on Amazon, it's a battle to get noticed.
That has now become the focus of the European Commission's investigation. After all, if Amazon is somehow choosing the winners and losers for its online store, that negatively affects the small and medium-sized businesses that rely on its platform to drive sales. If Amazon is found to not be in violation, the status quo -- good or bad -- will likely live on.
"E-commerce has boosted retail competition and brought more choice and better prices," European Competition Commissioner Margrethe Vestager said in a statement. "We need to ensure that large online platforms don't eliminate these benefits through anti-competitive behavior. I have therefore decided to take a very close look at Amazon's business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules."
Amazon did not immediately respond to an Inc. request for comment, but has had little to say in response to the investigation. The company only said publicly that it would cooperate with the investigation and work hard to help other businesses grow.
But in what might have been a shot over the investigation's bow on Wednesday, Amazon announced the results of its Prime Day 2019 sales event. In addition to saying that its event set a new record with 175 million sold items, Amazon said that its small and medium-sized business partners in its Amazon Marketplace also benefited from Prime Day. According to Amazon, those companies tallied $2 billion in total sales over the two-day period.
You can bet that figure won't go unnoticed when Amazon prepares to respond to the investigation. And it's also something that the European Commission will consider as it investigates Amazon.
Along the way, it'll be the small business owners in limbo, waiting to see how it all turns out.