Germany opens ‘anti-competition’ probe into Amazon with tougher law

Germany's competition authority said Tuesday it had opened an inquiry into online retail giant Amazon over potential "anti-competitive practices", using a new law giving regulators more power to rein in big tech companies.

Germany opens 'anti-competition' probe into Amazon with tougher law
An Amazon warehouse in Brandenburg. Photo: picture alliance/dpa/dpa-Zentralbild | Patrick Pleul

Federal Cartel Office head Andreas Mundt said his office is examining whether Amazon has “an almost unchallengeable position of economic power” and whether it “operates across various markets”.

If so, it would be deemed of “paramount significance”, said Mundt, adding that the regulator could “take early action against and prohibit possible anti-competitive practices by Amazon”.

“This could apply to Amazon with its online marketplaces and many other, above all digital offers,” he added.

Under the amendment to Germany’s competition law passed in January, the watchdog said it now has more power to “intervene earlier and more effectively” against big tech companies, rather than simply punishing them for abuses of their dominant market position.

READ ALSO: ‘I want to know origin of my grapes’: Amazon loses fruit and veg ruling in German court

The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny around the globe, including in the United States, where Google and Facebook are facing antitrust suits.

The Amazon probe is only the second time that Germany’s Federal Cartel Office has made use of its new powers, after first employing them to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

The watchdog already has two traditional abuse control proceedings open against Amazon.

One involves the company’s use of algorithms to influence the pricing of third-party sellers on Amazon Marketplace, while another is probing the extent to which Amazon and major producers such as Apple exclude third parties from
selling brand products.

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‘I want to know origin of my grapes’: Amazon loses fruit and veg ruling in German court

A German court ruled Thursday that Amazon must list the country or place of origin of fruit and vegetables it sells online, throwing out an appeal by the e-commerce giant.

'I want to know origin of my grapes': Amazon loses fruit and veg ruling in German court
Grapes grown in Malente-Malkwitz, Schleswig-Holstein in autumn 2020. Photo: DPA

Amazon is subject to the same rules as classic brick-and-mortar
supermarkets when selling fresh food online, the higher regional court in Munich ruled, in a victory for consumer rights groups.

“If I buy grapes in autumn, I might want them to come from Europe and not from South Africa,” said the judge, in remarks carried by national news agency DPA.

She added that consumers should not be sent a mango from Israel if they order a mango from Senegal.

According to EU regulations, food retailers are obliged to state the provenance of the fruit and vegetables they sell.

In 2018, consumer rights group Foodwatch filed a legal complaint against Amazon, accusing it of breaking the rules on its food section Amazon Fresh, launched in 2017.

The court upheld the complaint Thursday, saying Amazon had circumvented the rules by providing multiple different countries of origins on its online fruit and vegetable listings.

Amazon had argued that the nature of online retail made it harder to give specific information, especially when customers ordered in advance.

Yet the court rejected the argument, ruling that “if a particular business model doesn't fit EU laws, then it is the business model which has to be changed, not the laws.”

In a statement, Foodwatch hailed the ruling as “a sign that labelling rules apply not just to the shop on the corner, but also to the big players from Silicon Valley.”

Yet it also warned that “the Amazon Fresh case shows that the regulation of online food shops isn't working”.

READ ALSO: Amazon workers across Germany go on strike in the build up to 'online Xmas'