The European Commission has charged Amazon with breaking competition rules, accusing it of abusing its dominant position in online retail.
It said the tech firm used data on third-party sellers that use its marketplace to gain an advantage.
It also launched a fresh investigation into the possible preferential treatment of sellers that use Amazon’s logistics and delivery services.
Amazon rejected the charges, saying it offered consumers more not less choice.
“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,” she added.
The European Commission has been investigating Amazon since July last year, following complaints from traders.
It then uses this to help with sales of its own-label products, or in choosing suppliers, the Commission says.
In a statement Amazon insisted that – far from being anti-competitive – its private-label products were good for customers and offered more choice.
In August, boss Jeff Bezos became the richest man int he world with a fortune of more than $200bn after the firm’s share price rocketed in the early months of the pandemic.
Ms Vestager has taken a tough stance on US tech firms and what she sees as their grip on the digital landscape.
Meanwhile, in the United States, a report backed by Democratic lawmakers recently urged changes that could lead to the break-up of some of the country’s biggest tech companies, such as Amazon, Facebook and Google.
In October Amazon hit back in a blog post on its website: “The fact that third parties having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers”.