May 20, 2021
The Bundeskartellamt in Germany has initiated a proceeding against Amazon based on the new rules for large digital companies. It is the second proceeding that the Bundeskartellamt has opened based on the new competition law tool. A similar proceeding was already initiated against Facebook shortly after the amendment to the law entered into force in January 2021.
Andreas Mundt, President of the Bundeskartellamt: “In the past few years we have had to deal with Amazon on several occasions and also obtained far-reaching improvements for sellers on Amazon Marketplace. Two other proceedings are still ongoing. Parallel to these proceedings we are now also applying our extended competences in abuse control.
“In this particular case we are first of all examining whether Amazon is of paramount significance for competition across markets. An ecosystem which extends across various markets and thus constitutes an almost unchallengeable position of economic power is particularly characteristic in this respect. This could apply to Amazon with its online marketplaces and many other, above all digital offers. If we find that the company does have such a market position, we could take early action against and prohibit possible anti-competitive practices by Amazon.”
In January 2021 the 10th amendment to the German Competition Act (GWB Digitalisation Act) came into force. A key new provision set forth in Section 19a GWB now enables the authority to intervene earlier and more effectively, in particular against the practices of large digital companies.
The Bundeskartellamt can prohibit companies which are of paramount significance for competition across markets from engaging in certain anti-competitive practices. Examples of conduct which could be prohibited under the new provision include the self-preferencing of a group’s own services, the “penetration” of non-dominated markets by way of non-performance based anti-competitive means, such as tying or bundling strategies, or creating or raising barriers to market entry by processing data relevant for competition.
The Bundeskartellamt is also currently conducting two proceedings against Amazon based on the abuse control rules which were already in place before the latest amendment to the competition law. In one proceeding the authority is examining to what extent Amazon is influencing the pricing of sellers on Amazon Marketplace by means of price control mechanisms and algorithms.
In a second proceeding it is examining to what extent agreements between Amazon and brand manufacturers, including Apple, which exclude third-party sellers from selling brand products on Amazon Marketplace constitute a violation of competition rules.
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