UPDATED 12:34 EDT / DECEMBER 18 2017

CLOUD

France seeks to fine Amazon for allegedly abusing its market position

Amazon.com Inc. is facing a new legal challenge in the European Union.

On Monday, French daily Le Parisien broke the news that the country’s Economy Ministry has filed a complaint against the online retailer following a two-year investigation into its operations. Reuters cited the publication as saying that the probe was carried out by the agency’s DGCCRF consumer fraud watchdog. According to a government spokesperson quoted in the report, Amazon was found to be imposing “unbalanced relations” on sellers.

The complaint claims that the company exploited its leadership position in the ecommerce market to give itself excessive power over merchants. La Parsien reported that Amazon can, among other things, unilaterally change or suspend a contract with a seller.

The Economy Ministry has asked the Paris Commerce Court to fine the online retail giant for 10 million euros (about $11.8 million) over the alleged abuses. That wouldn’t be a major financial hit for Amazon, which closed the third quarter with $38 billion in revenues. But there may be bigger consequences if an earlier legal action against the company is any indication.

In May, Amazon agreed to modify the contractual terms it offers to European book publishers following an antitrust investigation led by EU competition commissioner Margrethe Vestager. Several other U.S. tech giants have also found themselves in Vestager’s sights recently. Earlier this month, for instance, Apple Inc. bowed to regulators’ demands by signing an agreement to pay $13 billion in back taxes to Ireland.

The growing pressure that the EU is putting on U.S.-based tech firms could give Amazon reason for concern going into 2018. As the leader in not one but two key markets, ecommerce and cloud computing, the company may have a particularly good chance of drawing regulators’ attention. This is especially true given its continuous efforts to expand into new segments

The General Data Protection Regulation that is currently being rolled out in the EU is set to make the legal situation even more complicated for American tech giants. Under the law, companies will have to take new measures to protect users’ privacy and give them more control over their information.

Image: Amazon

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