Amazon Warned By German Antitrust Watchdog Over Price Controls

The regulator contends that Amazon’s price controls could also force sellers out of the marketplace.

Amazon.com Inc. (AMZN) has been warned by Germany’s antitrust regulator over the e-commerce giant’s price controls for sellers on its platform.

Amazon’s shares fell 0.40% in pre-market trading on Monday.

Germany’s Federal Cartel Office (Bundeskartellamt) on Monday announced that it is investigating Amazon’s pricing mechanisms, with the agency’s President, Andreas Mundt, highlighting Amazon’s dominance when it comes to online retail in the country.

The e-commerce giant has a 60% market share in Germany’s online retail industry, he added.

“Since Amazon competes directly with other marketplace retailers on its platform, influencing competitors' pricing, even in the form of price caps, is fundamentally questionable from a competition perspective,” Mundt said.

The regulator argues that Amazon uses price control mechanisms to monitor the prices of goods on its platform. Mundt added that these mechanisms are not transparent.

If Amazon’s mechanisms determine that a product is priced too high, the company either removes corresponding offers or does not display the products in the highlighted shopping box.

The watchdog also explained that sellers are asked to either adjust their prices to match Amazon’s reference prices as determined by the company’s algorithms, or the sellers risk being deprioritised in search results or excluded from advertising on the platform.

The regulator contends that Amazon’s price controls could also force sellers out of the marketplace. It also added that there is a risk of concentration.

The Federal Cartel Office said it is coordinating with the European Commission, the executive arm of the European Union, to enforce regulations of the Digital Markets Act.

Amazon’s stock is down 6.55% year-to-date, but up 14.95% over the past 12 months.

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