Amazon's treatment of sellers comes under scrutiny in Germany

[November 29, 2018]  

By Emma Thomasson and Matthias Inverardi

BERLIN (Reuters) - Germany's antitrust authority has launched an investigation into whether U.S. ecommerce giant Amazon <AMZN.O> is exploiting its market dominance in its relations with third-party retailers who use its website as a marketplace.

The move comes as European regulators have been taking a tough line on U.S. tech giants like Google <GOOGL.O> and Facebook <FB.O>, with the European Commission also looking into Amazon's dual role as retailer and marketplace.

Germany's Federal Cartel Office said in a statement on Thursday that it had received many complaints from traders about the business practices of Amazon of late.

"Amazon acts as a kind of 'gatekeeper' to customers. The double role as biggest trader and biggest marketplace means there is a potential to impede other traders on the platform," said cartel office President Andreas Mundt.

Mundt said the investigation would examine the business conditions that Amazon imposes on traders using its site, including a lack of transparency over how it ends relations with merchants, delayed payments and shipping conditions.

An Amazon spokesman declined to comment on the proceedings beyond saying it was cooperating fully and would continue to work to support the growth of small and medium-sized businesses.

The European Commission is also investigating Amazon's dual function and is asking retailers and manufacturers whether Amazon's sales of own-brand products similar to theirs have harmed their business.
 

General view of the Amazon.de distribution centre in Bad Hersfeld September 22, 2014. REUTERS/Kai Pfaffenbach/File Photo

Germany is Amazon's second biggest market. It has faced a long-running battle with unions in the country over pay and conditions for logistics workers, who staged another round of strikes last week.

The cartel office said the probe into Amazon will seek to address any violations of German competition or anti-trust law, but does not foresee significant fines unless they are considered as part of a final ruling requiring a company to end any abusive market practices.

Investigators will contact retailers using the Amazon platform and examine their contracts.

The German antitrust watchdog is also investigating Facebook <FB.O> after finding the social media giant abused its market dominance to gather data on people without their knowledge or consent. Its ruling is expected in the New Year

(Additional reporting by Douglas Busvine in Frankfurt and Foo Yun Chee in Brussels; editing by Adrian Croft and Elaine Hardcastle)

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