The German Federal Cartel Office doubles down on its Amazon investigation

November 22, 2022 by
Frank Calviño

The german antitrust Federal Cartel Office (FCO or Bundeskartellamt in German) has announced that it is expanding its current Amazon investigation regarding possible illegal business practices in Germany. 

The FCO investigation will take into consideration a newly reformed German competition law, targeting digital giants. The investigation looks into pricing and instruments applied by Amazon to control marketplace sellers, with practices that could lead to monopoly and disloyal competition.

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The FCO (Bundeskartellamt) has two open investigations into Amazon’s activities in German e-commerce. These are now extended because it wants to include a new law for more effective oversight in e-commerce 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.

An algorithm to control the market 

The FCO will start its Amazon investigation by examining the marketplace’s price control mechanisms. According to FCO Amazon algorithmically controls price settings by partner sellers on the marketplace. This makes it difficult for customers to find product offers from these sellers.

But this is not the first time that the online marketplace is being scrutinized. This past summer, the Competition and Markets Authority in the UK launched an investigation into Amazon in the country, the accusations going in the same line of thought: it's slowly becoming a global monopoly that prevents free market competition. 

Also, in December last year, the company was fined by the Italian market authority AGCM as it was abusing its market dominance, again, Amazon was accused of monopolistic practices.

Not the first Amazon investigation in the EU

This is not the first time Amazon clashes with EU policymakers and law regulation institutions. 

In 2020, the internet titan was investigated by the European Commission under antitrust law, again for monopolistic business practices. 

At that time the European Commission informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. 

The Commission took issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third-party sellers.

The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.

The then executive Vice-President Margrethe Vestager, in charge of competition policy, said: 

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition.  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. The conditions of competition on the Amazon platform must also be fair.  Its rules should not artificially favor Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon is the leading e-commerce platform, fair and undistorted access to consumers online is important for all sellers.”

So far, Amazon has not been formally condemned for antitrust or antimonopoly practices in the EU. 

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