Global Management

Case Study #3:
Your response to each question should be 5-8 sentences in length and must be original content from you (no plagiarizing). Be sure that your response is substantiated with a clear opinion, examples and supporting details. Number your response to match the corresponding question.

Note: This case study has two parts. Be sure to complete both.

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Watch: What Google, Facebook and Apple can learn from Microsoft’s 1998 Antitrust Fight
Click here to access: https://www.youtube.com/watch?v=e33Go6gbL7s

Read: EU says Amazon breached Antitrust rules, opens second investigation into its e-commerce business
November 10th, 2020 | Silvia Amaro | CNBC

LONDON — The European Commission said Tuesday that Amazon (Links to an external site.) breached European antitrust rules by using independent sellers’ data for its own benefit.

It has also announced a second formal investigation into the company’s e-commerce processes.

In a statement, the commission said Amazon was using the data of third-party sellers — such as order numbers, revenues and number of visitors — to inform its strategic business decisions, like reducing the price of products.

The issue arises because of Amazon’s dual role in selling products itself, and acting as a platform for independent — sometimes rival — sellers.

“Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers,” Margrethe Vestager, the EU’s competition chief, said in the statement.

The commission, the executive arm of the European Union, launched a probe  (Links to an external site.)into the online retailer in July 2019 on concerns over anti-competitive behavior.

Amazon said it disagreed with the commission’s assertions and “will continue to make every effort to ensure it has an accurate understanding of the facts.” It said that it represents less than 1% of the global retail market.

“No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” the e-commerce giant said.

The commission’s second antitrust investigation will look at how the company choses which sellers offer products via Amazon Prime, its paid-for premium service. It will investigate the possible preferential treatment of Amazon’s own retail business and those that use its logistics and delivery services (known as “fulfilment by Amazon” sellers) over other sellers.

It will also look into the Amazon’s “buy box” function, which offers customers a one-click button to add a product to their shopping cart. U.S. regulators and third-party sellers have previously questioned Amazon over which products get placed in the all-important buy box. Amazon maintains that the buy-box features the offer it thinks customers will prefer overall, while factoring in things like price, delivery speed and Prime.

Vestager said that, while going through 80 million transactions and 100 million products listed on Amazon marketplace, “it became increasingly clear that there is something that we should look into further on the buy box.”

The company will have now the chance to examine the commission’s conclusions and reply in writing or via an oral hearing.

QUESTIONS:
Video
1. Why did the U.S. government decided to charge Microsoft with an antitrust lawsuit? Do you agree with the decision? Explain.

2. The video mentioned that Microsoft used its “sheer size” to stifle competition. Many have argued that Amazon, Apple, Google, and Facebook are doing the same as we speak. Why do you suppose the U.S. government has been lenient with these modern companies? Do you think they should also be charged with antitrust lawsuits?

Note: In October 2020, the United States 116th Congress launched an investigation into Facebook, Amazon, Apple and Google to begin assessing whether each company should be broken up and are engaging in practices to limit competition. More here (Links to an external site.).

Article
3. The European Union (EU) takes monopoly seriously and isn’t hesitant to issue antitrust lawsuits against companies. It is the very reason why U.S. companies aren’t as prominent in Europe as they are in America. What is Amazon doing that’s triggering this round of investigations? Do you agree with the reasoning for the investigation? Explain.

4. What are the consequences Amazon could face for engaging in risky behavior? Do you think the consequence is too harsh? Explain?

For more information on Global Management read this: https://en.wikipedia.org/wiki/Global_Management_Challenge

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