Extension of ongoing proceedings against Amazon to also include an examination pursuant to Section 19a of the German Competition Act (GWB)

The Bundeskartellamt has extended two ongoing abuse control proceedings against Amazon to now also include the application of the new instrument for more effective oversight over large digital companies (Section 19a GWB).

Andreas Mundt, President of the Bundeskartellamt: “We are examining in both proceedings whether and how Amazon impedes the business opportunities of sellers that are active on the Amazon marketplace and compete with Amazon’s own retail business. Amazon operates the most important marketplace in e-commerce and thus has a key position in that area, which allows the company to set far-reaching rules for competition on its platform. Our new competencies, which are precisely intended to restrict such power to set rules, allow us to intervene more efficiently against Amazon’s anti-competitive practices."

By its decision dated 5 July 2022 the Bundeskartellamt had already determined Amazon’s paramount significance for competition across markets and held that the new instrument is thus also applicable to the company (see also press release of 6 July 2022). Amazon has appealed this decision to the Federal Court of Justice. However, it remains preliminarily enforceable until the Federal Court of Justice’s decision.

In the first proceeding the Bundeskartellamt is examining price control mechanisms, i.e. the practice of algorithmic control of price setting by third-party sellers on the Amazon marketplace. The application of such mechanisms can make it difficult for end customers to find offers by sellers or even lead to these offers being no longer visible at all.

The second proceeding deals with the brandgating issue. The Bundeskartellamt is examining possible disadvantages for marketplace sellers caused by various instruments applied by Amazon, e.g. agreements with (brand) manufacturers on whether individual sellers can or cannot sell (brand) products on the Amazon marketplace.

Background

In January 2021 the 10th Amendment to the German Competition Act (GWB Digitalisation Act) came into force. A key new provision (Section 19a GWB) enables the Bundeskartellamt to intervene earlier and more effectively, in particular against the practices of large digital companies. Besides Amazon, the Bundeskartellamt already determined the paramount significance for competition across markets of Alphabet/Google and Meta/Facebook (in these two cases the decisions are final, see press releases of 5 January 2022 and 4 May 2022, respectively). Further proceedings directed against specific practices of large digital companies are ongoing against Google/Alphabet (see press releases of 21 June 2022, 4 June 2021, 12 January 2022 and 25 May 2021), Meta/Facebook (see press release of 28 January 2021) and Apple (see press release of 14 June 2022)