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Amazon versus marketplace merchants: FCO is investigating

Locations

Germany

Introduction

The Federal Cartel Office (FCO) is investigating whether Amazon influences pricing on the Amazon marketplace. According to the FCO, it received numerous complaints from merchants regarding Amazon's conduct.

The investigation is one of a number of antitrust measures being undertaken in Germany with regard to powerful platforms (eg, Facebook (for further details please see "Federal Court of Justice demonstrates antitrust law limits to data collection through Facebook") and Booking.com). The German legislature has also become active and included special provisions for powerful platforms in the upcoming antitrust law.

Background: current investigations

The merchants' complaints were based primarily on the fact that offers and products on the Amazon marketplace were blocked for incomprehensible reasons. Despite such complaints, these blocks were not lifted. According to the merchants, Amazon's intervention regarding the blocking of products is problematic.

However, such intervention has been justified by the argument that COVID-19-related price peaks had to be prevented. In this regard, President of the FCO Andreas Mundt explained: "[c]urrently we are investigating whether and how Amazon influences the pricing of the merchants on the marketplace" and "[w]e want to understand whether there is a systematic price monitoring in general, how it works and which intervention possibilities Amazon reserves for itself".

Previous proceedings against Amazon

Historically, the FCO has investigated and reprimanded Amazon. In 2013, the FCO prohibited Amazon from enforcing 'price parity'. Essentially, this prohibited retailers from offering all products that were offered on Amazon at lower prices elsewhere on the Internet.

In 2019, due to the FCO's antitrust concerns, Amazon amended its general terms and conditions to strengthen third-party traders' rights. Consequently, the abuse proceedings against Amazon at that time were closed.

Future outlook

The FCO's approach aligns with efforts by a number of national and international competition authorities in relation to large digital companies. In this context, the competition authorities are also trying to ensure competition in the digital world to the best extent possible. For example, the German legislature included special provisions for powerful platforms in the 10th amendment of the Competition Law (not yet in force).

In addition, EU competition law could be amended in this way. The European Commission is currently testing this under the keyword phrase 'new competition tool'. Further, EU Regulation 2019/1150 (the P2B Regulation) aims to provide more transparency and fairness for platform models.

 

Links

Higher Regional Court in Düsseldorf contradicts the Federal Cartel Office and allows Booking.com to use "narrow" best price clauses (German version only)

Assault on the monopoly: Amazon's dispute with marketplace traders escalates (German version only)

Amazon abandons price parity clauses for good

Bundeskartellamt obtains far-reaching improvements in the terms of business for sellers on Amazon’s online marketplaces

European Commission: fines Google record € 4.34 billion for abusing market power (Android)

The P2B regulation has come into force: New obligations for online platforms and search engines

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