dpa | Because of illegal price specifications, the Federal Cartel Office has ordered the online retailer Amazon to pay around 59 million euros. The company also has to limit its price specifications, as the authorities in Bonn announced. In the future, Amazon will only be allowed to use its pricing mechanisms for other companies that sell on the Amazon website in certain exceptions.
It is the first time that Germany’s top competition watchdog has taken financial measures against the US retail giant, which has a market share of 60 percent in German online retail. The Cartel Office is using a change in the law from 2023. The Cartel Office has already required Amazon and other US internet giants to change their behavior on several occasions so that their market power does not stifle competition in Germany and harm consumers.
Marketplace accounts for 60 percent of sales
Amazon doesn’t just sell goods itselfbut it has also opened its website to third-party sellers via its “marketplace” – they sell sports shoes, electronics or clothes. According to the Cartel Office, the marketplace accounts for 60 percent of Amazon sales in Germany.
In which Marketplace sales The third-party providers are bound to Amazon’s specifications. If the price is too high, the offer is either removed from the marketplace or it is no longer visually highlighted in the buy box – it disappears into insignificance, so to speak. The cartel office complains that this could lead to significant losses in sales.
Mundt: Practice endangers other retailers
“Amazon enters into direct competition with the other marketplace retailers on its platform,” says Cartel Office chief Andreas Mundt. “Therefore, influencing competitors’ pricing, even in the form of price caps, is only permitted in absolutely exceptional cases, such as price usury.”
Otherwise there is a risk that the price level on the trading platform will be controlled according to Amazon’s ideas in competition with the rest of online retail be used. “For the retailers affected, the interventions in pricing can mean that they can no longer cover their own costs – with the consequence that they are forced out of the marketplace,” says competition watchdog Mundt. The control mechanisms were based on non-transparent rules and notifications. It is not clear to marketplace traders what principles the price limits are based on and where they approximately lie.
Amazon rejected the allegations and announced that it would take legal action. The cartel office’s decision is based on a purely German regulation and is in direct contradiction to the consumer-related standards of EU competition law, said Amazon Germany boss Rocco Bräuniger. “As a result of this decision, Amazon would be the only retailer in Germany forced to highlight uncompetitive prices for customers. This makes no sense for customers, sales partners and competition.”