Introduction
Amazon decision
Further proceedings against Amazon
Section 19a
Comment
On 6 July 2022, the Federal Cartel Office (FCO) found that Amazon.com Inc is an undertaking with paramount significance for competition across markets. With this, the authority has subjected another large digital group to the special abuse control of section 19a of the German Act against Restraints of Competition (ARC), following similar decisions against Google and Alphabet Inc in January 2022 and Meta (formerly Facebook) in May 2022.
The FCO is now expected to open proceedings against Amazon to critically examine certain conduct. The FCO initiates proceedings following complaints from market participants and on its own initiative.
Amazon is one of the world's top-selling companies, with global sales revenues in 2021 of approximately €400 billion – approximately €32 billion of which were generated in Germany. In terms of marketplace services for commercial retailers in Germany, Amazon has a revenue-based market share of over 70% and, therefore, the FCO considers that it has a dominant position across markets. The importance of the trading platform is reinforced by Amazon's own retail activities on the platform, resulting in a "hybrid structure". In addition to the e-commerce platform, offerings that are made available to end customers include the provision of digital content (eg, movies, television series and music). According to the FCO, more than 17 million registered users have a paid Amazon Prime subscription. For companies, Amazon now offers services in advertising, logistics, payment processing and cloud computing, which is where it makes most of its group profits.
The FCO considers the services that Amazon offers to be so comprehensive that the president of the FCO, Andreas Mundt, labelled them a "digital ecosystem". According to Mundt, Amazon is "the key player in e-commerce". He added that "[o]ur investigations have shown that Amazon is of paramount significance across markets, also within the meaning of competition law".
Further proceedings against Amazon
The FCO is currently conducting two proceedings against Amazon, which are investigating the extent to which:
- Amazon uses price control mechanisms or algorithms to influence the pricing of retailers operating on the Amazon marketplace; and
- agreements between Amazon and brand manufacturers (including Apple) that exclude third-party retailers from selling branded products on the Amazon marketplace constitute an infringement of the competition rules.
In 2018, the FCO carried out an abuse proceeding related to Amazon's terms and conditions and conduct toward third-party retailers.
Section 19a of the Competition Act (GWB) was added to the ARC following the 10th GWB amendment. The aim of this provision is to enable the FCO to take faster and more effective action against large companies in the digital economy. As soon as the FCO has determined an overriding cross-market significance for competition with regard to a company, it can prohibit the companies in a second step from certain conduct that could endanger competition. The aim is to ensure functioning competition despite the "gatekeeper" function of large digital companies.
The FCO has moved to the next large digital group considered to be of overriding importance for competition across markets, following its Alphabet/Google and Meta decisions. It is anticipated that the FCO will prohibit Amazon from certain types of conduct in the near future.
For further information on this topic please contact Sascha Dethof at Fieldfisher (Germany) LLP by telephone (+49 211 950 749 0) or email ([email protected]). The Fieldfisher (Germany) LLP website can be accessed at www.fieldfisher.com.