Online retail giant, Amazon.com, Inc. (NASDAQ:AMZN), is under investigation by the Federal Cartel Office in Germany for possible violation of antitrust regulations, according to a report from BBC News.
According to the report, the Federal Cartel Office is investigating whether the pricing policy for its third-party merchants breached antitrust laws. A provision in Amazon’s policy prohibits merchants, who signed up in its Marketplace platform, from offering their products on a cheaper price in any platform including their own online store.
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Andreas Mundt, head of the Federal Cartel Office said, “Amazon’s price parity clause – which denies traders the freedom of offering a product cheaper elsewhere – may breach general cartel rules.This is particularly the case if restricting a trader’s price-setting freedom also hampers competition between different internet market places.”
In connection with the investigation of the Federal Cartel Office, it will question 2,400 traders who are selling their products directly to the customers of Amazon.com, Inc. (NASDAQ:AMZN), to find out if the online retail giant breach Germany’s antitrust regulation.
Ryan Hood, one of the German retailers selling his product on Amazon.com, Inc. (NASDAQ:AMZN), responded positively to the action of the antitrust regulators. According to him, the policy of the online retail giant has had negative impact on his business because consumers are guaranteed that price of the products on Amazon.com are cheapest on the web.
Last October, Hood talked to antitrust authorities regarding his concern and filed an antitrust complaint against the online retail giant. He owns the online retail site hood.de.
Amazon.com, Inc. (NASDAQ:AMZN) may be forced to remove the clause in its policy prohibiting merchants to offer cheaper prices elsewhere, if authorities prove that the company breached antitrust rules.
The Federal Cartel Office launched its investigation into Amazon.com, Inc. (NASDAQ:AMZN) after the online retail giant received criticisms regarding allegations that its temporary workers are mistreated in Germany. A television documentary showed the company’s security guards harassing temporary workers. German authorities asked the management of the company to explain the accusations. The company is also facing accusations that it is avoiding to pay taxes in the United Kingdom.
According to Amazon.com, Inc. (NASDAQ:AMZN), it will follow up the complaints made against the company.