AMZN Amazon.com Inc

Investors are looking to see if the company used its dominance to eliminate competition

By Paul Vieira 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 15, 2020).

OTTAWA -- Canada's antitrust watchdog said it has launched a civil investigation into Amazon.com Inc., and whether it is abusing its dominant position in the retail sector in its treatment of independent sellers on its site.

Canada is the latest jurisdiction to launch an antitrust probe into the online retailer's practices, which are garnering increased attention in Congress, among U.S. states and in Europe. Of particular interest among authorities is how Amazon treats third-party sellers who use the company's marketplace.

Canada's Competition Bureau said Friday that its probe is under way and "there is no conclusion of wrongdoing at this time." In revealing the investigation, it welcomed input from market participants regarding its concerns -- an indication, antitrust watchers say, of the priority the bureau is giving this case.

An Amazon spokesperson said the Seattle-based company is cooperating with the Competition Bureau's review.

The bureau said its investigation focuses on abuse of dominance, or whether a dominant firm in a market engages in behavior intended to eliminate competitors or deter the entry of new rivals.

Canadian antitrust investigators are looking at any past or existing Amazon policies that might affect third-party sellers' willingness to offer their wares for sale at a lower price on other retail channels. Further, they are probing whether third-party sellers are able to succeed without using the Fulfillment By Amazon program, under which Amazon handles the logistics.

In 2017, Amazon agreed to pay a penalty of one million Canadian dollars ($756,000) and vowed to change its pricing practices after a Competition Bureau investigation concluded the online retailer made unsubstantiated claims about savings on certain products.

Mark Warner, a competition and trade lawyer who practices in Toronto and New York, said the bureau has a mixed record on proving abuse of dominance in Canada. High-profile investigations against Google in 2016 and Apple Inc. in 2017 were discontinued without any enforcement action being taken, he said.

However, Mr. Warner added, "to the extent that it can ride sidecar along with enforcement actions in the EU and the U.S., the bureau's chances of succeeding probably increase exponentially."

The European Union has contemplated filing antitrust charges against Amazon over its treatment of third-party sellers, The Wall Street Journal reported in June. California is also reviewing Amazon's practices, while members of Congress are pushing the Department of Justice to launch its own probe into how the online retailer treats independent sellers.

Appearing last month before the House Judiciary Committee's antitrust subcommittee, Jeff Bezos, Amazon's chief executive, was accused by lawmakers of bullying independent sellers on the retailer's marketplace.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

August 15, 2020 02:47 ET (06:47 GMT)

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