Germany investigates Amazon over pandemic pricing

The German Federal Cartel Office is investigating Amazon over allegations that it may have abused its market dominance in the early stages of the coronavirus pandemic by blocking sellers from inflating prices of in-demand goods.

The investigation - first reported by German newspaper Frankfurter Allgemeine Zeitung - is focusing on Amazon’s relationship with third-party sellers on its marketplace.

Cartel Office president Andreas Mundt told the newspaper: “We are currently investigating whether and how Amazon influences retailers’ pricing on the marketplace.”

The regulator has previously worked to hold Amazon to account: in 2018 it forced the retailer to abandon a policy of forbidding sellers from offering their products at a lower price on other online sites, while in 2019 it forced Amazon to accept a suite of changes to the terms it offers third-party sellers.

The latest investigation began in April after the watchdog received a number of complaints that some sellers had been blocked from selling on its marketplace. Some third-party sellers had attracted public criticism for allegedly inflating prices of high-demand goods earlier during the pandemic, such as surgical masks and hand sanitiser.

Amazon has provided a written statement to the regulator after being given a series of questions. This statement is now being considered.

A spokesperson for the Cartel Office told CNBC that, even under extraordinary circumstances, it is “not up to a private platform to be a price regulator or the price police” and that Amazon had used “unknown mechanisms” to regulate sellers on its platform.

In a statement to the media, Amazon said: “We want customers to buy with confidence any time they make a purchase on Amazon.de and we have policies to help ensure selling partners are pricing their products competitively. Our systems are designed to take action against price gouging. If selling partners have concerns, we encourage them to contact our selling partner support.”

Amazon has faced difficulties in its second-largest market throughout the pandemic, with German warehouse workers in Bad Hersfeld, Leipzig, Rheinberg, Werne and Koblenz going on strike in June after fulfilment centre workers tested positive for Covid-19.

The striking staff complained that they had been forced to work without satisfactory provision of PPE and had been kept in the dark about the status of their colleagues.

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