German Federal Cartel Office launches an investigation into Amazon, which Amazon is expected to contest

Following Ms. Vestager’s investigation into Amazon and its own sector enquiry into online price comparison services in October 2017, in June 2018 the German Federal Cartel Office (“Bundeskartellamt”) claimed that it “received a lot of complaints” and is said to be “looking at the role and market power of Amazon” with regards to Amazon’s hybrid function. (Nicholas Hirst, MLEX, 27 June 2018, Amazon’s ‘hybrid function’ catches eye of German antitrust enforcers.) Germany is Amazon’s second largest market after the US. In a policy paper published in October 2018, the Bundeskartellamt summarized its concerns as follows:

“Not only did this dual business model allow the platforms to develop a strong market position based on increased network effects resulting from the large variety they offer. For instance, they provide a rapidly available wide and deep range of products, which can result in dealers’ businesses being dependent on the platforms. There is also the risk that, when cooperating with the manufacturers, independent dealers can be disadvantaged or even squeezed out of the market due to unfavourable conditions. As a competition authority, the Bundeskartellamt wants to keep markets open and prevent e-commerce from being concentrated in the hands of only a few players, i.e. the manufacturers themselves, some large dealers and even fewer leading platforms, which would dramatically reduce customers’ choice options.

With the EC’s initiation of proceedings for the adoption of a prohibition decision against Amazon, the Bundeskartellamt will lose its competence to further investigate the same conduct (Article 11(6) 1/2003). It is unknown whether it has yet referred the case to the EC. In any case, the Bundeskartellamt’s preliminary findings and concerns are also likely to play a role in the EC’s investigation.

Amazon is likely to "fiercely defend" claims that it is a dominant platform for sellers in Germany, a competition law expert has said.

In a statement, Amazon said: "We do not comment on ongoing proceedings. However, we will cooperate fully with the Bundeskartellamt and continue working hard to support small and medium-sized businesses and help them grow."

1. Source: http://competitionlawblog.kluwercompetitionlaw.com/2018/11/30/the-eus-competition-investigation-into-amazon-marketplace/

Author: Thomas Höppner, Philipp Westerhoff (Hausfeld)

Publication: Kluwer Competition Law Blog

2. Source: https://www.out-law.com/en/articles/2018/december/amazon-competition-case-germany/

Author: Out-Law.com team

Publication: Out-Law