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German antitrust watchdog, the Federal Cartel Office (FCO), has announced that it is widening its investigation into Amazon’s activities in Germany. The renewed investigation will take into account a reformed German competition law, targeting digital giants. The investigation looks into pricing and instruments applied by Amazon to control marketplace sellers.
Law reform applicable
The FCO has two open investigations into Amazon’s activities in German ecommerce. These are now extended because it wants to include a new law for more effective oversight in ecommerce giants. In July this year, the organization already determined Amazon’s paramount significance for competition across markets. This makes the new law applicable to Amazon.
‘Our new competencies allow us to intervene effectively against Amazon’s practices.’
“We are examining in both proceedings whether and how Amazon impedes the business opportunities of sellers that are active on the Amazon marketplace and compete with Amazon’s own retail business. Amazon operates the most important marketplace in ecommerce and thus has a key position in that area, which allows the company to set far-reaching rules for competition on its platform”, said Andreas Mundt, president of the FCO. “Our new competencies, which are precisely intended to restrict such power to set rules, allow us to intervene more efficiently against Amazon’s anti-competitive practices.”
Investigation into price control and brandgating
The FCO will start by examining the marketplace’s price control mechanisms. According to the watchdog, Amazon algorithmically controls price setting by partner sellers on the marketplace. This makes it difficult for customers to find product offers from these sellers.
‘Amazon could have agreements with manufacturers about products sold by third-party sellers.’
The second investigation focuses on what the watchdog calls brandgating, which are possible disadvantages for sellers on the marketplace caused by instruments applied by Amazon. For example, the ecommerce giant could have agreements with manufacturers about whether sellers can or cannot sell certain products on the marketplace.
European investigations into Amazon
It is not the first time that the online marketplace is being scrutinized. This summer, the Competition and Markets Authority in the UK launched an investigation into Amazon’s dominant position in the country. In December last year, the company was fined by Italian market authority AGCM as it was abusing its market dominance.
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