The Bundeskartellamt, or the Federal Cartel Office of Germany, has prohibited Amazon from continuing its practice of using mechanisms to control the prices charged by sellers on its platform in the country. Germany’s competition regulator explained that the company uses “various price control mechanisms” to review prices set by third-party Markerplace sellers. If the website deems a specific listing’s pricing as too high, it allegedly removes the listing altogether or prevents it from being prominently displayed in the Buy Box section that lets you quickly purchase items. If those listings aren’t removed completely, they’re banished to less prominent sections like in the “See all buying options” and the “Other sellers on Amazon” lists. This reduced visibility could “lead to significant losses in sales” for sellers.
Amazon was found to have engaged in anti-competitive practices, because the company itself runs its own retail business and sells goods on the platform. That makes third-party sellers, which make up for 60 percent of the items sold on the website, direct competitors. Cartel Office president Andreas Mundt said Amazon must only be allowed to influence competitors’ pricing “in the most exceptional cases,” such as “in the event of excessive pricing.” He didn’t specify what the agency views as “excessive pricing,” but he said allowing the company to continue its current practices will give it the power to “control the price level on the trading platform according to its own ideas.” He also said that Amazon could use its mechanisms “to compete with the rest of the online retail sector outside”of its own website. Amazon’s interference could lead to third-party sellers “no longer being able to cover their own costs, forcing them out of the Marketplace,” he added.
Rocco Bräuniger, Amazon’s country manager for Germany, told Bloomberg that the company will appeal the ruling and will continue operating as usual. “Amazon would be the only retailer in Germany forced to highlight non-competitive prices for customers,” he said. ”This makes no sense for customers, sales partners, or competition.” He also asserted that the office’s decision will throttle innovation in the European Union.
Amazon has been under scrutiny in Europe for years now. Back in 2022, it pledged not to use private sellers’ data to compete with them in the Marketplace in the EU. It also promised to give sellers "equal treatment” when ranking them in the Buy Box section.
“The Bundeskartellamt considers this systematic interference in the Marketplace sellers’ freedom to set their own prices to constitute an abuse under the special provisions for large digital companies (Section 19a(2) of the German Competition Act (GWB)) as well as a violation of the general abuse provisions under Section 19 GWB and Article 102 TFEU,” the agency wrote. “…In these proceedings, the Bundeskartellamt has worked closely with the European Commission, which is responsible for enforcing the EU Regulation on contestable and fair markets in the digital sector (Digital Markets Act).”
The agency is slapping Amazon with a fine due to those violations, but the $70 million penalty it’s asking for is merely partial payment based on the economic benefits the company enjoyed from its alleged anti-competitive behaviors. According to the Bundeskartellamt, the identified antitrust violations are still ongoing, so Amazon may have to pay more.
This article originally appeared on Engadget at https://www.engadget.com/big-tech/amazon-germany-fined-70-million-for-influencing-third-party-marketplace-pricing-140000588.html?src=rss