The following are the opening remarks from Lucy C. Cronin (VP, EU Public Policy) in the panel ‘Shaping policies for online platforms’, at the OECD Digital Economy Ministerial Meeting, 15 December 2022.
Thank you for having me here today among so many distinguished speakers and giving me the opportunity to make a few points on the opportunities, but also the challenges, of operating in an increasingly digitized economy.
Today’s debate is a complex one as the distinction between online and offline becomes more and more blurred. Amazon competes with social media platforms that enter online retail but also with classic bricks-and-mortar shops that take orders online or brands that have offline and online flagship stores. At Amazon, we don’t just compete with quote-unquote “online companies”, but also brick-and-mortar retailers. If we do not deliver on our promise of great prices, vast selection and convenient delivery, our customers will simply choose to always go to a store down the road.
However, it is the largest online players receive most of the attention these days and whether we like it or not, Amazon is often counted in this group. The Digital Markets Act and the Digital Services Act in the EU specifically single out “big tech”, and impose heavy regulatory requirements on a small group of companies. In my view, regulatory frameworks that focus on size alone and ignore the convergence of online and offline business models jeopardize the level playing field, which in turn is a prerequisite for competition and innovation in the markets.
It shouldn’t matter whether a retailer collects data from customers’ shopping history online or offline via widely spread loyalty card schemes. How a supermarket stocks its shelves, places certain brands prominently, or complements its selection with private label goods should, in principle, be subject to the same rules as those for online retailers. And finally, consumers should have confidence in the services they use and in the products they buy, both offline and online, whatever the type or size of the business they buy from.
Even if, for the sake of this debate, we limit ourselves for a moment to the online economy, I want to caution against merging together services and business models that, in reality, vastly differ from one another. Some platforms or services – take social media or online search – may be built on monetizing consumer data, for others this data is just one of several business inputs. In a few areas we may see “winner takes it all” effects. However, the vast majority of services face fierce competitive pressure, especially in low margin sectors such as retail. That is why one-size-fits-all rules risk failing to address the specific challenges posed by some, and stifle the legitimate practices of others.
Over 650,000 jobs have been created in the EU and the UK by more than 225,000 small and medium enterprises (SMEs) that sell on Amazon in Europe where we have invested €100 billion since 2010. And we will continue to do so, both here and elsewhere and an important factor for this is conducive policies and regulatory frameworks.
Let me be clear about this point though: we agree that with size comes legitimate scrutiny and we welcome regulation where it is consumer-centered. We have shown in the past that we are ready to engage constructively with regulators and we will comply with legislation that addresses legitimate concerns and applies in a non-discriminatory way to all relevant players. All we ask for is proportionate measures that ensure room for innovation and further growth – and I am encouraged to see that yesterday’s OECD Declaration on the Digital Future does explicitly recognize the need for policy frameworks that tackle challenges while also promoting innovation. This is particularly true in times like these, when the macroeconomic outlook is uncertain. With the wave of regulatory initiatives over the past years, we risk putting additional pressure on businesses that need to manage the digital transition while facing volatile markets.