The regulator found that the conduct amounted to an abuse of market power under both German competition law and European Union (EU) antitrust rules.
- Germany’s top competition regulator has barred Amazon from using automated tools to set prices charged by independent sellers on its marketplace.
- Additionally, the cartel office imposed a disgorgement order of roughly 59 million Euros ($69.5 million) against Amazon.
- Amazon has one month to appeal the ruling to Germany’s Federal Court of Justice.
Germany’s Federal Cartel Office has taken decisive action against Amazon.com Inc. (AMZN), restricting how the global e-commerce giant can influence pricing on its German marketplace and imposing a financial penalty for anticompetitive conduct.
The regulator said the conduct amounted to abuse of market power under both German competition law and European Union (EU) antitrust rules. Additionally, the cartel office imposed a disgorgement order of roughly 59 million Euros ($69.5 million) against Amazon, equivalent to the benefits the company gained from its anticompetitive behaviour.
Regulatory Block On Price Influence
Germany’s top competition regulator has barred Amazon from employing automated tools that steer the prices charged by independent sellers on its marketplace. The authority concluded that Amazon’s existing mechanisms went beyond simply flagging potentially overpriced items and effectively controlled how third-party vendors set their prices.
Amazon stock inched 0.1% higher in Thursday’s premarket. On Stocktwits, retail sentiment around the stock shifted to ‘neutral’ from ‘bearish’ territory the previous day amid ‘high’ message volume levels.
Marketplace Operations In Focus
On Amazon’s German platform, roughly 60% of goods are sold by third-party merchants rather than directly by Amazon, and these sellers traditionally determined their own list prices.
The watchdog said the tools Amazon uses to manage prices are unclear and dependent on vague rules. Also, sellers are not clearly told how the price limits are decided. This creates a lack of transparency and an uneven playing field.
“For affected sellers, Amazon’s interference in their pricing may result in them no longer being able to cover their own costs, forcing them out of the Marketplace.”
-Andreas Mundt, President, Germany’s Federal Cartel Office
Amazon now has one month to appeal the ruling to Germany’s Federal Court of Justice.
AMZN stock has declined by over 1% in the last 12 months.
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