Germany Launches Investigation Into Amazon

Amazon is facing an investigation by Germany’s national competition regulator over the eCommerce giant’s relationship with third-party sellers, Reuters reports.

“We are investigating whether and how Amazon influences how traders set prices on the Marketplace,” Andreas Mundt, president of the Federal Cartel Office, told the Frankfurter Allgemeine Zeitung daily newspaper, according to Reuters.

After the U.S., Germany is Amazon’s second largest market.

As stores were shuttered to prevent the spread of the virus and shoppers switched to online purchases, Mundt said there were complaints that Amazon blocked some sellers because of allegedly high prices.

“Amazon must not be a controller of prices,” Mundt told the German newspaper.

He said while Amazon has responded to his office’s requests for information, those statements are being evaluated.

Reuters reports the Cartel Office was unavailable for comment.

In response, Amazon said the company’s policies were designed to guarantee its partners set competitive prices.

“Amazon selling partners set their own product prices in our store,” a spokeswoman said. “Our systems are designed to take action against price gouging, and those who had concerns should contact its support team for its merchants.”

Previously, Amazon prevented sellers from offering their products cheaper on other online sites. But Germany’s antitrust watchdog forced Amazon to abandon that policy.

In 2019, Amazon agreed to amend its terms of service for third-party merchants. As a result, the Cartel Office dropped a previous investigation.

Germany’s investigation comes one week after the Competition Bureau of the Canadian government announced it was probing Amazon to determine whether is affecting competition and hurting customers and companies that do business in Canada.

The Bureau said its investigation will include the ability of third-party merchants to be successful on the eCommerce retailer’s Marketplace without advertising on the Canadian platform or harnessing Fulfillment by Amazon.

Last month, Amazon CEO Jeff Bezos told the House Committee on the Judiciary, Subcommittee on Antitrust, Commercial, and Administrative Law that his company comprises only a portion of the retail market and there’s plenty of room for competition. 

“The global retail market we compete in is strikingly large and extraordinarily competitive. Amazon accounts for less than 1 percent of the $25 trillion global retail market and less than 4 percent of retail in the U.S. Unlike industries that are winner-take-all, there’s room in retail for many winners,”

Bezos also told lawmakers that the retailer took the unprecedented step of letting third-party merchants into its stores in 1999. He noted that third-party sales comprise 60 percent of the items on Amazon, and the sales are expanding quicker than the eCommerce retailer’s own sales.

“We didn’t have to invite third-party sellers into the store,” he told the panel. “We could have kept this valuable real estate for ourselves. But we committed to the idea that over the long term it would increase selection for customers, and that more satisfied customers would be great for both third-party sellers and for Amazon.”