EU launches in-depth probe on Amazon over data use

The EU investigation involves Amazon’s service to third party merchants who use the world’s biggest online retailer to access customers and broaden their reach. (AFP)
Updated 17 July 2019
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EU launches in-depth probe on Amazon over data use

  • Formal investigation opens a new chapter in the EU’s campaign to address the dominance of US tech firms
  • At the heart of the case is Amazon’s service to third party merchants

BRUSSELS: The EU’s powerful antitrust authority launched an in-depth investigation into Amazon on Wednesday, amid suspicions the US-based online behemoth misuses merchant data hosted on its website.
The formal investigation opens a new chapter in the European Union’s campaign to address the dominance of US tech firms with Google, Facebook and Apple also regular targets of regulators in Brussels.
With its probe, the EU competition watchdog is seeking to expand its oversight powers to data, the most prized asset for Silicon Valley giants that now dominate web-use worldwide.
“I have ... decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer (and) to assess its compliance with EU competition rules,” the EU’s anti-trust commissioner Margrethe Vestager said in a statement.
At the heart of the case is Amazon’s service to third party merchants who use the world’s biggest online retailer to access customers and broaden their reach.
In providing this service, Amazon “continuously collects data about the activity on its platform,” the commission said.
Preliminary findings, according to the statement, indicate that Amazon “appears to use competitively sensitive information — about marketplace sellers, their products and transactions on the marketplace.”
The opening of a formal investigation procedure does not prejudge its outcome, but if fault is found the sanctions by the EU can reach up to 10 percent of sales.
“The stakes for the digital economy are high, because any action by the Commission can have an impact on the business model of web giants, which is based on data accumulation,” said Andrea Collart, of the consulting firm Avisa in Brussels.
The investigation, which has no deadline, is likely to be the final offensive by Vestager against big tech before the end of her current mandate on October 31.
In an email to AFP, Amazon said: “We will cooperate fully with the European Commission and continue working hard to support businesses of all sizes and help them grow.”
The probe adds to Vestager’s long list of cases against US Big Tech.
During her five-year term, Brussels has slapped Google with a combined $9.5 billion in antitrust fines and scrutinized Apple and Facebook for breaches of competition, tax and data rules.
Amazon in 2017 was ordered to pay back taxes of about €250 million to Luxembourg because of illegal tax breaks.
The company also settled with Brussels over its distribution deals with e-book publishers in Europe.


Egypt’s creative solutions to the plastic menace

Updated 24 August 2019
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Egypt’s creative solutions to the plastic menace

  • Egyptian social startups are taking alternative approaches to fostering awareness and reducing waste
  • While initiatives around the world are taking action to combat this problem, some Egyptian projects are doing it more creatively

CAIRO: Global plastics production reached 348 million tons in 2017, rising from 335 million tons in 2016, according to Plastics Europe. 

Critically, most plastic waste is not properly managed: Around 55 percent of it was landfilled or discarded in 2015. These numbers are extremely concerning because plastic products take anything from 450 to 1,000 years to decompose, and the effects on the environment, especially on marine and human life, are catastrophic.

While initiatives around the world are taking action to combat this problem, some Egyptian projects are doing it more creatively.

“We’re the first website in the Middle East and North Africa that trades waste,” said Alaa Afifi, founder and CEO of Bekia. “People can get rid of any waste at their disposal — plastic, paper and cooking oil — and exchange it for over 65 products on our website.”

Products for trading include rice, tea, pasta, cooking oil, subway tickets and school supplies.

Bekia was launched in Cairo in 2017. Initially, the business model did not prove successful.

“We used to rent a car and go to certain locations every 40 days to collect waste from people,” Afifi, 26, explained. “We then created a website and started encouraging people to use it.”

After the website was launched, people could wait at home for someone to collect the waste. “Instead of 40 days, we now could visit people within a week.”

To use Bekia’s services, people need to log onto the website and specify what they want to discard. They are assigned points based on the waste they are offering, and these points can be used in one of three ways: Donated to people in need, saved for later, or exchanged for products. As for the collected waste, it is given to specialized recycling companies for processing.

“We want to have 50,000 customers over the next two years who regularly use our service to get rid of their waste,” Afifi said.  

Trying to spread environmental awareness has not been easy. “We had a lot of trouble with initial investment at first, and we got through with an investment that was far from enough. The second problem we faced was spreading this culture among people — in the first couple of months, we received no orders,” Afifi said.

The team soldiered on and slowly built a client base, currently serving 7,000 customers. In terms of what lies ahead for Bekia, he said: “We’re expanding from 22 to 30 areas in Cairo this year. We’re launching an app very soon and a new website with better features.”

Go Clean, another Egyptian recycling startup dedicated to raising environmental awareness, works under the patronage of the Ministry of Environment. “We started in 2017 by recycling waste from factories, and then by February 2019 we started expanding,” said founder and CEO Mohammed Hamdy, 30.

The Cairo-based company collects recyclables from virtually all places, including households, schools, universities, restaurants, cafes, companies and embassies. The customers separate the items into categories and then fill out a registration form. Alternatively, they can make contact through WhatsApp or Facebook. A driver is then dispatched to collect the waste, carrying a scale to weigh it. 

“The client can be paid in cash for the weight of their recyclables, or they can make a donation to a special needs school in Cairo,” Hamdy explained. There is also the option of trading the waste for dishwashing soap, with more household products to be added in the future.

Trying to cover a country with 100 million people was never going to be easy, and Go Clean faced some logistical problems. It overcame them by hiring more drivers and getting more trucks. There was another challenge along the way: “We had to figure out a way to train the drivers, from showing them how to use GPS and deal with clients,” said Hamdy.

“We want to spread awareness about the environment everywhere. We go to schools, universities, companies and even factories to give sessions about the importance of recycling and how dangerous plastic is. We’re currently covering 20 locations across Cairo and all of Alexandria. We want to cover all of Egypt in the future,” he added.

With a new app on the way, Hamdy said things are looking positive for the social startup, and people are becoming invested in the initiative. “We started out with seven orders per day, and now we get over 100.”