Frankfurt (Germany) (AFP) – Germany’s competition watchdog ordered Amazon on Thursday to stop implementing price controls for retailers on its marketplace and told the US tech giant to return 59 million euros ($70 million) in what it deemed unfair gains.
Third-party retailers on Amazon’s marketplace in Germany set their own prices, but Amazon uses various mechanisms to review them and can remove products it considers too expensive. However, the company’s methods are “based on non-transparent rules,” according to Germany’s Federal Cartel Office, adding that it was not clear to third-party retailers how price caps were determined.
“Amazon directly competes with the other marketplace sellers on its platform,” said the cartel office’s president, Andreas Mundt. “Therefore, influencing its competitors’ pricing, including through price caps, is only permissible in the most exceptional cases, such as in the event of excessive pricing,” he said. The risk is that Amazon—which accounts for 60 percent of online sales in Europe’s top economy, according to the watchdog—will abuse its power to compete with the third-party retailers, he said.
The cartel office has ordered Amazon to return nearly 59 million euros that it said Amazon gained through anti-competitive behaviour. This is only part of the amount Amazon may have to ultimately return, the agency said, as the investigation is ongoing.
Amazon said it planned to appeal the “unprecedented regulatory decision” and would continue to operate its online store as usual while it prepares the legal action. The watchdog’s decision “directly contradicts the consumer-related standards of EU competition law,” said Amazon’s Germany head Rocco Braeuniger. “As a result of this decision, Amazon would be the only retailer in Germany forced to highlight non-competitive prices to customers. This makes no sense for customers, sales partners, or competition,” he said.
Amazon has one month to file an appeal, which will be heard by the Federal Court of Justice. Germany’s cartel office began investigating Amazon’s pricing rules in November 2022.
© 2024 AFP
