Amazon is once again in the eye of the storm in Europe. The Bundeskartellamt, the German competition authority, has published a preliminary assessment that questions how the eCommerce giant influences the prices set by sellers on its marketplace.
The investigation revolves around Amazon’s price control mechanisms, which, according to the German authority, may be violating both Article 102 of the Treaty on the Functioning of the EU (TFEU) and Articles 19 and 19a of the German Competition Act (GWB). These regulations apply to companies with significant systemic influence in the digital market, such as Amazon. In fact, according to the regulator itself, amazon.de represents approximately 60% of the retail eCommerce in Germany, making its actions in the market all the more significant.
As we know, the company acts both as a direct seller (Amazon Retail) and as an intermediary for third-party sellers (Marketplace). The Bundeskartellamt explains that this dual function means that Amazon competes directly with external sellers while applying rules that affect their ability to compete.
As Andreas Mundt, president of the Bundeskartellamt, explains: “Amazon competes directly with marketplace sellers on its platform and influences the prices of its competitors, including through price caps, which is problematic from a competition standpoint. This applies especially when the sellers in question can no longer cover their own costs and the commercial platform is used to hinder the rest of online retail contrary to competition law.”
According to the investigation, Amazon imposes dynamic and opaque price caps based on algorithms that use internal and external data to determine when a product presents a “price error,” a “significantly high” price, or is simply “non-competitive.” The consequences can be drastic: product removal, exclusion from the Buy Box, or reduced visibility in search results and advertising campaigns.
Let us remember, the Amazon BuyBox is the purchase box that appears at the top right of a product page on Amazon when a customer is ready to make a purchase. This box contains the “Add to Cart” or “Buy Now” button and facilitates the purchase of the product by the customer. As you can imagine, being present in this prominent box is a vital goal for any seller: only one seller controls this space for each specific product at any given time, and being in it greatly increases conversion chances.
For the regulator, this system, based on unclear rules, restricts sellers’ freedom to set their own prices and may lead to them not being able to cover their costs, thus increasing the risk of greater market concentration in favor of Amazon itself.
Andreas Mundt states that these practices could be designed to coordinate Amazon marketplace prices under a logic dictated exclusively… by Amazon. This strategy not only standardizes prices but also dissuades competition, particularly harming sellers who attempt to compete with lower prices outside the platform.
Furthermore, the German authority also questions an Amazon practice not related to its own competition with sellers but with the rest of the eCommerce ecosystem: “In particular, Amazon’s practice of consistently matching the lowest price from other online stores across its platform could present a significant barrier to change and discourage other online retailers from competing on price and offering lower prices,” states the release.
With this price matching policy and considering the enormous influence in the local sector, amazon.de poses a risk to regional competition. If a retailer tries to lower their prices to attract customers, Amazon can quickly adjust its own prices to match or even lower them further, maintaining market control. This creates a “uniform pricing” effect, where real competition based on price is reduced or disappears, as sellers cannot differentiate through price.
The process, which includes large-scale surveys among online sellers on the German portal, has been coordinated with the European Commission —within the framework of the DMA— and with the Bundesnetzagentur, which monitors compliance with the Platform-to-Business Regulation. Amazon now has the opportunity to respond to these accusations before a final decision is made.
However, this case could easily spread to other EU countries.
Think of it this way: Amazon operates with similar models in all major European markets. What we have told you is not foreign to Italian, French, or, of course, Spanish sellers. Therefore, practices questioned in Germany could be seen as abusive in other countries as well, particularly when they affect sellers and consumers across Europe.
Indeed, the investigation is being conducted in close collaboration with the European Commission, which has the authority to enforce the Digital Markets Act (DMA), the regulation for digital platforms with significant market power. If Germany concludes that Amazon is abusing its position, the Commission could open sanctioning procedures or impose obligations at the European level.
Image: Flux Schnell
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