German cartel office initiates abuse proceeding against Amazon

By Chris Dawson November 29, 2018 - 10:26 am

The German cartel office, the Bundeskartellamt, has initiated abuse proceeding against Amazon to determine if the marketplace’s terms of business and practices towards sellers on its German Amazon marketplace are anticompetitive.

The proceeding was triggered by numerous complaints from sellers about Amazon’s business practice which the Bundeskartellamt has received in the recent past and raises the question as to whether Amazon has become too powerful and imposes unfair demands and policies on their merchants.

The terms of business and related practices which might be considered abusive are liability provisions to the disadvantage of sellers, in combination with choice of law and jurisdiction clauses, rules on product reviews, the non-transparent termination and blocking of sellers’ accounts, withholding or delaying payment, clauses assigning rights to use the information material which a seller has to provide with regard to the products offered and terms of business on pan-European despatch.

“Amazon is the largest online retailer and operates by far the largest online marketplace in Germany. Many retailers and manufacturers depend on the reach of Amazon’s marketplace for their online sales. Amazon functions as a kind of “gatekeeper” for customers. Its double role as the largest retailer and largest marketplace has the potential to hinder other sellers on its platform. Because of the many complaints we have received we will examine whether Amazon is abusing its market position to the detriment of sellers active on its marketplace. We will scrutinize its terms of business and practices towards sellers.”
– Andreas Mundt, President, Bundeskartellamt

The European Commission has also begun investigations based on European competition law into Amazon’s European marketplaces, in particular into Amazon’s collection and use of transaction data. In summer 2018 the Commission sent out extensive questionnaires to several hundred German retailers to this effect. The Bundeskartellamt’s and the Commission’s proceedings supplement one another. Whereas the Commission’s investigations focus on Amazon’s use of data to the disadvantage of marketplace sellers, the Bundeskartellamt is examining in particular the company’s terms of business and practices towards sellers on its German Amazon marketplace.

  • Jay
    3 years ago

    This (we can only hope) is the beginning for proper regulation for marketplaces.

    Terminating seller accounts, withholding funds from suspended accounts, an almost impossible appeals process, complete lack of transparency, no help whatsoever and overall complete disregard for the fact that “real” businesses with “real people as staff” and “real bills to pay for” trade on Amazon, would be just scraping the surface of what comes to mind right now.

  • 3 years ago

    Lets hope that the UK Government is watching with interest as change is needed and quickly. Until somebody big enough like the Government stands up and changes things then they will carry on. And don’t forget this hopefully will include Ebay in the future as well.

  • 3 years ago

    There are real issues with Amazon that should be sorted out but it’s their market place so their rules.

    I am glad I do not get many issues with customers but how is them still keeping 12% of the fee when a customer has returned an item as they no longer need it?

    No wonder Amazon are happy for customers to return goods, its a win/win for them.

    • 3 years ago

      Just checked and in this year they have kept back £152.55 for refunds of which £16.02 was on one transaction.

      On the plus side I did complain about this sometime last year and got a £50 credit to my account.

  • ac
    3 years ago

    Isnt this just the fulfilment fee?

    • 3 years ago

      A fulfillment fee? I do not use FBA.

  • Darren
    3 years ago

    There are big issues that need sorting out with Amazon, I hope this investigation forces them to address some of them.

    Using 3rd party merchant sales data to identify high volume sales items and copying them or going to the manufacturer direct has to be the biggest unfair practice.

    Amazon giving themselves a perfect metrics score so that they have the advantage on the buy box even when their performance is in reality far lower than merchants in many cases.

    The unilateral suspension of accounts and holding on to funds and holding stock to ransom on the basis of a unsubstantiated complaints.

    Failure to do enough to protect sellers from fraudulent ‘buyers’.

    These are the 4 things I would like to see addressed.

  • Jay
    3 years ago

    The problem we have since the rise of Amazon in almost every developed country in the world, is that each year an increasingly larger number of each countries small businesses join Amazon thus placing more power into the hands of Amazon themselves.

    Since small businesses make up the majority of the workforce (in most countries) globally, each year more and more people’s livelihoods are now being placed in the hands of an unregulated service provider.

    At this point I think Governments “have” to get involved, rather “should” get involved. We are waaaay past the “should” stage. Marketplaces like Amazon aren’t regulated like energy companies or fianancial services are and that’s a problem. Without regulation it’s completely open to abuse and that exactly what it’s like for a seller… abusive.

    “You do as I say or I’ll take it all away from you”

    That’s what we’re dealing with.

    Amazon will continue to dominate every aspect of people’s lives, and as a principle, that in itself is anti-competitive.

    • jim
      3 years ago

      much small business would not exist without amazon or ebay
      many more have thrived
      because of Amazon or ebay

      careful what you wish for

    • 3 years ago

      @jim very true, but is a little fairness not expected?

  • jim
    3 years ago

    fairness is nice if it happens .
    though not something we expect
    in business
    business is cut throat dog eat dog

    • 3 years ago

      @jim I don’t disagree with you, if it was my business I would not want somebody telling me how I should run it.

      Nobody is forcing anybody to use Amazon, you could find another way of selling your items, there are many people that run eCommerce websites without using Amazon, eBay etc, to completely rely on any of them is foolish. Imagine having £10/20/50K of stock in Amazon FBA and having a problem with them.

      Like you say, if it happens it happens, other businesses are legislated by the powers that be, so it could happen.

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