Amazon punished sellers for price gouging during lockdown. Germany is checking if that was legal

August 17, 2020, 2:57 PM UTC

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Amazon has a long history with Germany’s antitrust authority, and now the watchdog is probing the e-commerce behemoth yet again.

This time it’s about the inflated prices that some third-party sellers charged on Amazon’s platform in the early days of the coronavirus pandemic.

The issue isn’t so much the high prices themselves—a problem that earned Amazon a class action lawsuit back home in the U.S.—but rather the fact that Amazon responded by punishing the sellers.

Amazon has been open and indeed bullish about suspending seller accounts over the offense of price gouging during the early COVID-19 lockdowns. CEO Jeff Bezos said in April that it had kicked out more than 6,000 sellers around the world, turning over some of their information to U.S. state attorneys general offices. Amazon is also lobbying Congress for a federal price-gouging law.

In Germany, this campaign could turn out to be illegal, given Amazon’s growing power in the country’s e-commerce market.

“Due to high prices, some dealers were kicked out of the system,” Kay Weidner, a spokesman for Germany’s Federal Cartel Office, told Fortune Monday. “We wanted Amazon to explain to us this price-monitoring system they have, and why they have it.

“We sent out a couple questions to Amazon. They answered quite comprehensively, and we are now evaluating” those answers, Weidner said, while declining to give a timeline for that evaluation.

The investigation was first made public in a Frankfurter Allgemeine Zeitung interview with Andreas Mundt, the Federal Cartel Office’s president.

The penalty

If the Federal Cartel Office decides that Amazon is breaking German antitrust law, it could in theory fine the company, though history suggests that it is pretty successful at getting Amazon to change its behavior instead.

Back in 2013, the German antitrust watchdog forced Amazon to change its terms and conditions for third-party sellers: The company previously banned sellers from charging less for their wares on other online platforms, compared with the prices they set on Amazon.

And just last year, the Federal Cartel Office forced Amazon to amend the terms it gave sellers regarding liability, jurisdiction, and confidentiality—this time across the world.

This latest probe isn’t even the first to take place in the context of the pandemic.

According to Weidner, some sellers also complained when, in the early days of the COVID-19 outbreak lockdown, Amazon prioritized the shipping of certain essential products over other wares. Amazon responded to the Federal Cartel Office’s questions, and the watchdog came away satisfied with the firm’s response.

“Amazon selling partners set their own product prices in our store,” an Amazon spokesperson said in an emailed statement regarding the investigation that is now ongoing.

“We want customers to buy with confidence anytime they make a purchase on, and we have policies to help ensure selling partners are pricing their products competitively,” the spokesperson said. “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 is also being investigated by the European Commission’s antitrust directorate, which wants to see whether Amazon is using data from third-party sellers on its platform to better promote its own products. The Wall Street Journal reported in June that formal antitrust charges may be looming on that front.

Antitrust issues aside, Amazon has had a string of labor issues in Germany. Strikes are fairly regular events at Amazon’s logistics warehouses, and—as in France—that trend has been continuing during the pandemic.

At the end of June, workers at six of Amazon’s German facilities went on strike for two days, owing to safety fears that followed the infection of dozens of their colleagues.

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