Germany Fines Amazon 59 Million Euros!

Amazon Faces Penalty in Germany

The Federal Cartel Office of Germany (Bundeskartellamt) announced that Amazon has been suppressing prices of third-party sellers on its online platform through non-transparent mechanisms. Holding approximately 60% of online sales nationwide, Amazon removes products from its platform or restricts the visibility of products that it finds to have 'high' prices.

Price Manipulation and Reason for the Penalty

The announcement by the relevant authority stated that a fine of 59 million euros was imposed due to Amazon's price restriction on independent sellers. The imposition of the penalty indicates that Amazon's pricing authority is limited, except in cases of exorbitant pricing situations.

Violation of Competition Rules

Andreas Mundt, President of the Federal Cartel Office of Germany, reminded that Amazon is a direct competitor with sellers on its platform, stating that "Amazon cannot abuse its market power by manipulating the prices of its competitors." Mundt emphasized that when prices are considered high, the visibility of products is deliberately reduced, negatively affecting free competition.

New Authority and Significant Penalties

This penalty is the first to be imposed under the new authorities that became effective in 2023. Amazon not only sells its products but also provides a platform for other retailers through Amazon Marketplace. The Federal Cartel Office announced that Amazon has used statistical models to establish dynamic price ceilings for third-party offers; if these ceilings are exceeded, products are either removed from the homepage or entirely deleted.

Amazon's Appeal Process Begins

Amazon categorically denied the allegations against it. Amazon Germany CEO Rocco Brauniger stated that the decision contradicts European Union (EU) competition standards and argued that consumers would be harmed in this situation, indicating that the company would appeal the decision. Brauniger remarked, “If Amazon is forced to offer non-competitive prices in the store, this will lead to a poor shopping experience.”