Germany accuses Amazon of abusing its dominance amid pandemic

German authorities claim it’s “not up to a private platform to be a price regulator or the price police”

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German authorities are investigating Amazon for allegedly abusing its dominance amid the coronavirus pandemic. 

The German Federal Cartel Office is leading the probe and is investigating the company’s relationship with third-party sellers on its platform. The Cartel Office began its investigation in April after receiving several complaints that Amazon had blocked some sellers for allegedly inflating prices.

“We are currently investigating whether and how Amazon influences retailers’ pricing on the marketplace,” Cartel Office president Andreas Mundt told Frankfurter Allgemeine Zeitung in an interview.

A spokesperson for the Cartel Office explained in a statement to CNBC it is “not up to a private platform to be a price regulator or the price police.” The spokesperson added Amazon is using “unknown mechanisms” to regulate third-party sellers on its platform.

Amazon has since provided the German watchdog with a statement after it asked the company several questions pertaining to the probe. The responses are now considered part of the investigation.

The Cartel Office has declined to comment on how long the probe will take.

In response to the probe, an Amazon spokeswoman told Reuters the company’s policies were designed to ensure its partners set competitive prices.

“Amazon selling partners set their product prices in our store,” the spokeswoman stated.  “Our systems are designed to take action against price gouging.” 

In a March blog post, the company stated it has zero tolerance for price gouging and has put a number of policies and systems in place to prevent it. 

“If we find a price that violates our policy, we remove the offer and take swift action against bad actors engaged in demonstrated misconduct, including suspending or terminating their selling accounts and referring them to law enforcement agencies for prosecution under relevant laws,” the blog post added.

Amazon previously prevented sellers from offering their products via other online sites at a lower price than on Amazon. Germany’s antitrust watchdog forced it to abandon the policy in 2013. The company also reached a deal with the German authority to overhaul its terms of service for third-party merchants last year.  

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