Amazon hit with first financial penalty by German anti-trust watchdog

Germany’s anti-trust authority on Thursday ordered Amazon to pay around around €59 million ($69.6 million) for imposing unlawful pricing requirements on third-party sellers.

The Federal Cartel Office said Amazon may in future apply price controls to other companies selling on its platform only in narrowly defined and exceptional cases.

The decision marks the first time Germany’s top competition watchdog has taken financial action against Amazon, which holds an estimated 60% share of the country’s online retail market.

Amazon said it would appeal the decision.

The Bonn-based regulator has previously ordered Amazon and other major US tech companies to change their conduct, arguing their market power risks stifling competition in Germany and harming consumers.

With the latest ruling, the authority has again stepped up enforcement.

Amazon does not only sell products directly but also allows third-party merchants to sell a vast array of items, such as shoes, electronics and clothing, via its Marketplace e-commerce platform.

According to the regulator, the Marketplace accounts for around 60% of Amazon’s revenue in Germany.

Pricing rules for third-party sellers

Third-party sellers on the platform are subject to Amazon’s pricing rules.

For instance, if a seller’s price is deemed too high, the offer may be removed from the Marketplace or excluded from the prominently displayed Buy Box section, effectively rendering it invisible to most customers.

This practice can lead to significant revenue losses for sellers, the cartel office said.

“Amazon competes directly with other Marketplace sellers on its platform,” said Andreas Mundt, head of the Federal Cartel Office, in a statement.

“Therefore, influencing competitors’ pricing, even in the form of price caps, is only permissible in exceptional cases, such as price gouging,” he said.

Otherwise, Mundt said, there is a risk that prices on the platform are steered according to Amazon’s interests and used as a competitive weapon against the wider online retail market.

The watchdog also criticized the pricing control mechanisms as opaque, saying sellers are not clearly informed how price thresholds are determined or where those limits lie.

Amazon rejected the allegations and said it would appeal.

The cartel office’s decision is based on a purely German legal provision and directly contradicts the consumer-focused standards of EU competition law, said Amazon Germany head Rocco Bräuniger.

“As a result of this decision, Amazon would be the only retailer in Germany forced to highlight uncompetitive prices to customers. This makes no sense for customers, sales partners or competitors,” he said.