On one side is the annual carnival shopping festival, and on the other hand is the “yellow card warning” from the regulators. Amazon’s “Prime Day” this year is a mixed blessing.

July 15th - 17th is Amazon's annual "Prime Day" peak promotion day. Unlike the previous 24 hours, this year's promotion lasts for 48 hours. Some product discounts even exceed the "Black Five" shopping season. It is an uncompromising global "consumer's carnival, the feast of merchants." Then the excitement was not over yet, and an announcement from the European Union poured a cold water on Amazon.

On July 17, local time, the European Commission announced that it would investigate Amazon to determine whether it violated EU anti-monopoly regulations in terms of using data on merchants on the platform. Amazon said it will "actively cooperate with the EU investigation."

At the beginning of the US stock market tonight, Amazon's share price has not been affected too much, and fell slightly.

To bully? Data abuse?

The focus of the EU's launch of an antitrust investigation against Amazon is data.

The anti-monopoly department of the European Commission believes that Amazon has a dual role. On the one hand, it is a retailer itself, on the other hand, it is the product sales platform of other retailers. Amazon is suspected of collecting data from third-party merchants on the platform to increase its sales. Make a profit for yourself.

Therefore, the focus of its investigation will fall on how Amazon uses data from third-party merchants on its platform. To put it simply, whether Amazon collects this data to understand the current hot products, consumer interest points, and consumer expectations.

European Commission antitrust commissioner Margrethe Vestager said that as more and more Europeans choose and are keen on online shopping, this issue is crucial. She said that e-commerce promotes competition in the retail industry and brings many benefits to consumers, such as more product choices and more affordable prices. It is necessary to ensure that large e-commerce platforms will not obliterate these benefits through “anti-competitive behavior”. .

Some analysts pointed out that if Amazon is indeed found to be in violation of the EU anti-monopoly law, it may face a 10% penalty on global turnover. Bloomberg pointed out that waiting for Amazon may be litigation, or a huge ticket, or be ordered to change its business model.

In fact, since September last year, the EU antitrust agency has initiated a preliminary investigation of Amazon and sought feedback from Amazon's “dual role” on retailers and manufacturers.

The friction between Amazon and the EU is not the first time. As early as October 2014, the European Union announced that it had initiated an investigation into the tax agreement signed by Amazon with the Luxembourg government to determine whether Amazon illegally transferred profits and “tax evasion”. After three years of investigation, the EU finally ruled that Amazon will pay the Luxembourg government a tax of 250 million euros.

Amazon, one of the business's e-book businesses, has also encountered EU antitrust investigations. In June 2015, the European Union announced a formal anti-monopoly investigation for the business, saying that Amazon and publishers signed unfair terms, making it difficult for other e-book dealers to develop new products and services to compete with Amazon. Two years later The two sides reached a settlement.

Amazon's 2018 annual report shows that third-party merchant sales have accounted for nearly 60% of its e-commerce business, so the issue has been given priority by the anti-monopoly department. The day before, an anti-monopoly hearing with one of Amazon's main characters was held in the United States on the other side of the Atlantic. Representatives from Amazon, Facebook, Apple and Google attended the hearing. Amazon's deputy general counsel, Nate Sutton, was asked by David Cicilline, chairman of the US Antitrust Subcommittee, that Amazon collects all the data on hot-selling products, and whether the company uses the data to leverage algorithms to promote Amazon's proprietary branded products. According to Sutton, companies collect data to attract consumers to buy the right product or to achieve the best deal, without considering whether the seller is a third-party merchant.

At the same time, the friction between the EU and the US technology giants is not the first time. Vestager has repeatedly questioned and “suppressed” large US technology companies. Since 2017, led by the European Commission, Google has imposed nearly $10 billion in antitrust fines; Apple and Facebook's competition and data behavior have also been investigated.

Data is the advantage of cloud computing business

The data problem becomes the focus of friction and is also the advantage of Amazon.

According to some analysts, Amazon has a number of business lines, such as e-commerce business, offline retail, hardware equipment, streaming media business, cloud computing, etc., super-diversified operations, large and numerous business tentacles, making it a natural data center. This has a unique advantage in its development of cloud computing.

In 2018, Amazon's annual revenue increased 31% year-on-year to $232.887 billion, surpassing $200 billion for the first time; net profit increased 232% year-on-year to $10.073 billion, surpassing $10 billion for the first time. Although e-commerce and subscription services have slowed down, cloud business has grown rapidly and has become the “main force” of performance.

Amazon's "flywheel effect" has always been a topic that the industry is willing to talk about. The general idea is that the company has a wide range of business and a wide range of business modules, but each seemingly unrelated business will work together and be driven like a gear. Form a virtuous circle that drives the company's faster development.

In order to speed up the Amazon flywheel, Amazon is also increasing its investment in technology, especially data and cloud computing. According to data released by PricewaterhouseCoopers in November, Amazon's R&D investment ranks first among the major technology giants. Some analysts said that the huge investment will make the Amazon AWS ecosystem continue to evolve and maintain the "king of cloud computing" status.

Market participants have analyzed that Amazon is advancing the advantages of “self-contained traffic” in the next-generation business such as cloud services: relying on a wide network of e-commerce and intelligent voice assistants, Amazon can generate billions of transactions, goods, supply chain, logistics, etc. every day. The field is generating data all the time, and it is itself a natural “data kingdom”.

Wind data shows that as of July 16 this year, Amazon's share price rose by 33.82%, in the FAANG + Microsoft six major technology stocks in the middle of the increase, but significantly outperformed the US stock market over the same period, the market value increased by more than 250 billion US dollars.