German cartel watchdog starts investigation into Amazon dominance

The German Bundeskartellamt starts an investigation into possible abuse of power by Amazon. The cartel watchdog is investigating whether Amazon has a “substantial influence” on competition. If so, Amazon could be punished for “anti-competitive practices.”

According to the cartel watchdog, Amazon has such an influence on competition in various markets that the company needs to be scrutinized. The investigation aims to find evidence that Amazon is so powerful in certain markets that competitors have next to no chance. The Bundeskartellamt can do this because it has new powers to tackle large tech companies since January. This allows the watchdog to intervene earlier if it judges that a large tech company is making improper use of its position of power.

With the new powers, the cartel watchdog can prohibit tech companies from engaging in anti-competitive practices, such as self-prioritization, or make it more difficult for others to enter a market by, for example, processing all the relevant data that a competitor would need.

The Amazon investigation is the second investigation that the Bundeskartellamt is conducting under the new powers. In December, it started an investigation into Facebook, because Facebook requires Oculus users to have a Facebook account. With the powers, it was able to broaden the investigation into Facebook’s dominance in January.

In addition to these, the watchdog has two other cases against Amazon. In one case, it investigates whether Amazon influences the prices of sellers on Amazon Marketplace with, for example, algorithms. The other case looks at agreements between Amazon and manufacturers that exclude third-party sellers on Market Place from selling certain products.