UK Edition
Germany launches antitrust probe into Amazon
Germany's Federal Cartel Office has launched an investigation into Amazon’s "double role" as the country’s largest retailer and biggest online host for small businesses, raising the pressure on UK regulators to take similar action.
Germany’s national competition regulator will look closely at factors that may be disadvantaging sellers, such as contract clauses restricting lawsuits against the tech giant and rules around the blocking and closing of sellers accounts.
“Amazon functions as a kind of gatekeeper for customers,” said Andreas Mundt, head of the Federal Cartel Office, also known as Bundeskartellamt.
“Its double role as the largest retailer and largest marketplace has the potential to hinder other sellers on its platform.”
The start of an investigation into Amazon’s operations in its biggest market outside the US is set to bring increased scrutiny to the retail giant across the European Union, with UK regulators and campaigners closely monitoring the situation.
The Competition and Markets Authority, Britain’s competition watchdog, said it was eyeing the situation in Germany and planned to consult with other national authorities.
The CMA said: “Promoting competition in digital markets is one of the CMA’s priorities. Technology has transformed some markets, and brought with it benefits such as increased choice and convenience, but it also gives rise to some risks to competition. We engage with other national authorities and will note the outcome of the German investigation.”
The German investigation comes after the European Commission (EC) said in September it planned to investigate Amazon's use of data it holds on third-party sellers using its platform, and whether it is using this to its advantage.
The EC wants to ensure the e-commerce giant isn't using that data to replicate products and cannibalise sales from sellers using its platform.
German regulators say that “numerous” complaints have been received from sellers on Amazon about the way the company gathers information on products in order to build their own and steal a march on competitors.
The Federation of Small Businesses, an organisation representing small and medium-sized businesses in the UK, has called for greater transparency in the way large online platforms like Amazon operate.
“The future for small businesses is digital, and online platforms can provide tremendous opportunities for small firms, giving an easy route to start to trade globally. However, it is important that digital platforms operate fairly,” An FSB spokesperson said.
“We hope the EC’s proposal for platform-to-business regulation will lead to more transparency, and assure small business users that any unfair practices will not be tolerated.”
Europe has in recent years taken a tough approach to US tech firms for violating antitrust laws, with the likes of Google on the receiving end of hefty fines from the EU Commission.
Amazon is adamant that it tries to benefit small businesses across Europe, with the company claiming that German SMEs can reach “hundreds of millions of customers worldwide”.
In 2017, German SMEs that sold their products through Amazon Marketplace, an e-commerce platform run by Amazon for third-party sellers, achieved export sales of more than 2.1bn euros, according to the retail giant.
An Amazon spokesperson said: "We do not comment on ongoing proceedings. However, we will cooperate fully with the Bundeskartellamt and continue working hard to support small and medium-sized businesses and help them grow.