On the day Amazon revealed Prime Day was the largest shopping event in company history, European lawmakers went after the retail giant.
The European Commission announced it opened an antitrust probe into Amazon, looking into the company’s “dual role as marketplace and retailer.” Investigators are questioning whether the company gives itself an unfair advantage by using the data it receives from third-party merchants on its site to sell its own private-label goods.
“In terms of all the regulation, I think it's very real,” Craig Birk, Personal Capital‘s chief investment officer, told Yahoo Finance’s On the Move . “Both in the U.S. and in Europe, governments are looking at these big, huge mega cap tech companies. And it's really just interesting to see the swing happen so fast in the last year from, you know, everybody loving these companies to both politically and in the popular culture are taking a kind of a different angle on it.”
The U.S. raised its own antitrust questions this week. Representatives from Amazon ( AMZN ), Apple ( AAPL ), Alphabet ( GOOGL ) and Facebook ( FB ) were grilled on Capitol Hill, with lawmakers examining if their sizes harms competition.
When it comes to Amazon, in particular, despite the concerns over its use of data and antitrust, consumers still just want to receive products quickly via Prime, “so a lot of times when consumers sort for product on Amazon they’re looking for something that’s Prime not always least expensive,” Tom Forte, D.A. Davidson senior research analyst, told Yahoo Finance’s On the Move .
“Consumers still love and need these services, so governments are not going to be able to regulate them, or shut them down, or really throttle their businesses in the short term,” said Birk. “I think it does establish a ceiling for perhaps just how big and how influential these companies can grow. So, for investors expecting that 20%-plus percent growth year after year after year. At some point, there is a limit to that.”
Kenneth Underwood is a senior producer for Yahoo Finance. Follow him on Twitter @TheKennyU .