Germany’s Bundeskartellamt (Federal Cartel Office, or FCO) issued a preliminary legal assessment last week suggesting that Amazon had potentially infringed both European and national rules on abuse of dominance. At issue in the investigation is Amazon’s price-control mechanisms, also known as pricing filters.
The filters rely on algorithms and statistical models, particularly dynamic price caps imposed on sellers’ offers. These mechanisms are triggered when Amazon detects that a seller’s price on Amazon Marketplace is significantly higher than prices either previously offered on Amazon or previously or currently offered by competing retailers (but not those on other platforms/marketplaces). In such cases, Amazon may remove the offer from the Marketplace if it deems the price to be the result of an error, or exclude it from the Amazon Buy Box if the price is considered excessively high.
Unfortunately, the FCO’s case appears problematic in several respects, at least based on what can be gleaned from the office’s press release. More generally, the effect of the FCO’s assessment would be to increase regulatory fragmentation and legal uncertainty across the EU, as it undermines both the role of the Digital Markets Act (DMA) and of the European Commission’s antitrust enforcement. Moreover, the specific claims the FCO asserts appear to be confused and not particularly compelling.
While the FCO clearly expresses concerns about Amazon’s dual role and the potential conflict of interests that it might entail, there is no actual allegation of self-preferencing. Moreover, the German antitrust authority simultaneously complains about two seemingly contradictory risks: on the one hand, that sellers might leave the Marketplace because they are forced to charge excessively low prices; on the other, that Amazon might raise prices on the Marketplace by matching the lowest prices found on other online shops.
The FCO’s Concerns
Against this background, the FCO raises three main concerns about Amazon’s price-control mechanisms:
- The mechanisms’ lack of transparency, which the office asserts appear unreasonable and not objectively justified;
- The risk that Amazon may pressure sellers to set prices below cost, potentially forcing them to exit the Marketplace; and
- The possibility that Amazon systematically matches the lowest prices found at competing online retailers, thereby discouraging those retailers from engaging in price competition or offering lower prices.
The first allegation reflects the recent trend among EU antitrust authorities to invoke the prohibition on unfair-trading conditions. While this is a longstanding provision of EU competition law, it has rarely been applied in the past due to the difficulty of establishing a clear standard to assess the fairness of terms and conditions.
Antitrust authorities, however, increasingly see unfair trading as a convenient tool to address the imbalance of bargaining power between dominant platforms and business users by challenging terms deemed unbalanced as one-sided, disproportionate, and thus not objectively justified—see, e.g., the European Commission’s decisions in Apple – App Store Practices (music streaming) and Facebook Marketplace, as well as the French competition authority’s decisions in Google – online advertising, Google – related rights, and Apple – ATT framework. The revival of fairness standard has become a powerful enforcement shortcut, enabling authorities to sidestep the evidentiary burdens associated with antitrust analysis rooted in the consumer welfare standard.
The second allegation, by contrast, seems to reflect concerns about self-preferencing—namely the risk that Amazon may exploit its dual role as both intermediary and competitor on its own platform by favoring its products. But this claim is not explicitly articulated, and the term “self-preferencing” is never used in the FCO press release. Instead, the office more broadly notes that, since Amazon competes with Marketplace sellers on its own platform, any interference with sellers’ ability to set their own prices raises serious competition issues.
Finally, with its third allegation, the FCO argues that Amazon’s practice of systematically matching the lowest prices found on other online shops across its entire platform may amount to a uniform pricing strategy that, in turn, could lead to higher prices, as competing online retailers may be discouraged from engaging in price competition.
The FCO’s preliminary findings should be assessed along two lines of argument: first, in light of the broader framework governing the relationship between the DMA and antitrust enforcement; and second, based on the specific merits of the case.
Regulatory Fragmentation and Legal Uncertainty
I warned in a paper published a few years ago in the European Law Review about the liaison dangereuse between the DMA and antitrust enforcement. In particular, I highlighted that risks stemming from the overlap of the DMA and national competition-law enforcement are compounded by member states’ ability to reinforce their antitrust frameworks through platform-specific provisions.
Indeed, I specifically pointed to Germany’s recent legislative initiatives as an example of this trend, arguing that they run counter to the spirit of the DMA and effectively amount to a kind of “Germanexit” from EU competition policy. These initiatives include the new Section 19a of the German Competition Act (GWB), which introduces a rebuttable presumption against seven types of abusive practices when carried out by undertakings of “paramount significance for competition across markets.” Since the list of practices is similar to and functionally equivalent to those covered by the DMA, the provision is often referred to as the German “mini-DMA.”
The concerns about regulatory fragmentation and legal uncertainty are hard to ignore in the Amazon case. Notably, Amazon’s contested clauses appear to comply with both the DMA and competition law, as they do not constitute parity clauses. Indeed, Amazon is not checking whether a seller offers lower prices on rival platforms; rather, it benchmarks prices across the broader industry.
With regard to the DMA, the rationale and justification for harmonization at the EU level lie in the cross-border nature of the services provided by digital platforms, which makes it impossible for member states acting individually to effectively address the identified competition problems. On the contrary, the application of national rules is seen as a threat to the functioning of the EU single market for digital services, and to the coherence of digital markets more broadly.
Given that large online platforms operate across the EU, the DMA has been justified as necessary to prevent regulatory fragmentation and to safeguard the integrity of the single market for digital services. But if a company that complies with the DMA is still challenged under national laws, it’s clear that the DMA has lost its role and purpose.
Moreover, the FCO’s proceedings also call into question the uniformity that antitrust enforcement at the EU level is supposed to ensure. Indeed, the design of Amazon’s Buy Box has already been reviewed and approved by the European Commission. In accepting the commitments Amazon offered in 2022, the Commission declared that the adopted measures would address the risks of self-preferencing by ensuring, among other things, the unbiased selection of offers and nondiscriminatory access to the Buy Box.
A Critical Assessment of the Claims Against Amazon
The substance of the FCO’s claims raises additional questions. In the first place, it is unclear why the proceedings also target pricing errors. When sellers’ high prices result from mistakes, their exclusion from the Marketplace should be seen as a positive measure aimed at protecting both consumers and the sellers themselves, whose commercial reputation could otherwise be harmed by such errors.
I wouldn’t dwell too much on the analysis of the objective justification or transparency of Amazon’s pricing filters. As previously mentioned, this issue reflects a broader and more strategic revival of the fairness standard, whose core rationale is to ease enforcement by sidestepping the need for rigorous economic analysis of disputed conduct. In the absence of clear guidance on how to interpret the fairness standard, this policy shift is one I have already criticized in a paper published in the Antitrust Bulletin.
Furthermore, the allegation that Amazon’s price caps constitute exclusionary conduct (on the grounds that sellers are often unable to cover their costs, as claimed by the FCO) requires robust empirical support. Without such evidence, there is a risk of merely penalizing lower prices, ultimately to the detriment of consumers.
Indeed, from a competition perspective, as previously illustrated, Amazon’s pricing filters do not restrict inter-platform competition by preventing sellers from offering better deals on rival marketplaces. On the contrary, these pricing mechanisms can be readily understood as measures intended to safeguard the reputation of a reliable online marketplace where consumers can expect to find competitive prices. Moreover, in the absence of a clear allegation of self-preferencing, the incentive for an intermediation platform like Amazon to exclude sellers from the Marketplace is not immediately apparent.
The third allegation further complicates the picture, as it rests on the opposite concern: that Amazon is pursuing a strategy to raise prices on the Marketplace. According to the FCO, Amazon’s practice of systematically matching the lowest prices found on other online shops across its entire platform could create significant switching barriers and discourage competing retailers from engaging in price competition or offering lower prices.
This hypothesis is surprising, at least at first glance, as it does not seem fully consistent with the earlier claim that Amazon seeks to cap prices in order to force sellers off the Marketplace. Furthermore, in the absence of horizontal effects on rival platforms, it remains unclear how such a strategy could succeed.
Conclusion
I expect that, once available, the statement of objections will shed more light on the FCO’s claims. In this regard, for instance, it would be relevant to know which specific practice under the new Section 19a that Amazon is alleged to have infringed.
Until then, based on reading the press release, my state of mind can best be captured by adapting the title of a well-known U2 song: I still haven’t found what the FCO is looking for.
