Still Haven’t Found What the Bundeskartellamt Is Looking For: Thoughts on the German Amazon Case
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.