Germany goes after Amazon (again), using tougher law

Germany's Bundeskartellamt is already running two investigations into Amazon, as well as one against Facebook

Germany's antitrust watchdog, the Federal Cartel Office (Bundeskartellamt), has launched an investigation into Amazon over the alleged use of anti-competitive practices.

The regulator opened the inquiry using a new law, which came into effect earlier this year, giving it more powers to legislate against big tech firms.

'In a first step, we are looking at whether Amazon is of outstanding, cross-market importance for competition,' Bundeskartellamt said in a statement.

If the investigation finds that the American retail giant is exploiting its market dominance, the watchdog could use Germany's new laws to prohibit any antitrust practice at an initial stage.

This is the second investigation Bundeskartellamt has started based on the new competition law. It initiated a similar proceeding against social media platform Facebook in January, shortly after the amendment to the law came into effect.

The regulator is also conducting two other proceedings against Amazon, based on rules that were already in place before the latest amendment to the antitrust law.

In one proceeding, Bundeskartellamt is investigating Amazon's alleged use of price control mechanisms and algorithms to influence the pricing of sellers on the Amazon Marketplace. In the second probe, it is investigating whether deals between Amazon and brand manufacturers are preventing third-party sellers from selling brand products on the Amazon Marketplace.

"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," said Andreas Mundt, President of the Bundeskartellamt.

"Two other proceedings are still ongoing. Parallel to these proceedings we are now also applying our extended competences in abuse control."

In a statement to AFP, an Amazon spokesperson said the firm "cannot comment on ongoing proceedings and will fully cooperate with the FCO."

They added, "We continue to focus on innovating for both our customers and the businesses in Germany that sell in our store."

Amazon says it has invested €28 billion in Germany in the past 10 years and employs over 23,000 people.

Bundeskartellamt's new investigation comes as big tech firms are facing increased scrutiny worldwide, including in the USA, EU and UK.

Last year, the USA's House Judiciary Committee's Antitrust Subcommittee released the findings of a 16-month investigation, into the challenges posed by the dominance of tech giants in the digital economy.

The report concluded that big technology companies like Amazon, Google, Apple, and Facebook are effectively monopolies, which should be broken up to restore competition and improve innovation in the industry.

In March, the UK's Competition and Markets Authority (CMA) launched a probe into Apple over App Store policies. The regulator set out to examine whether Apple's terms and conditions for developers are forcing users to spend more money for apps and add-ons.

Last year, the CMA also advised the government to introduce new, tailored competition rules to 'proactively shape' the behaviour of the most powerful tech firms.

The new, legally binding code of conduct will be enforced through a new Digital Markets Unit (DMU), announced in November last year.

The regime will form part of a wider regulatory framework for digital markets, driving competition and innovation in the market and enabling the government to harness the full potential of digital markets, the CMA said.