Germany's competition authority has issued a preliminary warning to Amazon over pricing mechanisms that could breach national and European Union competition laws, raising fresh concerns about the tech giant's dominance in online retail.

The Bundeskartellamt said on Monday that Amazon's price control systems for third-party sellers on its marketplace platform may constitute abuse under special provisions for large digital companies, as well as general competition rules.

Amazon operates the amazon.de trading platform, which accounts for around 60 per cent of online retail sales in Germany. The platform serves both Amazon's own retail business and as a marketplace where third-party sellers offer goods directly to customers.

"Competition in Germany's online retail trade is largely determined by the rules Amazon sets for its trading platform," said Andreas Mundt, president of the Bundeskartellamt. "As Amazon directly competes with the Marketplace sellers on its platform, influencing its competitors' pricing, including in the form of price caps, is inherently problematic from a competition perspective."

The German regulator's concerns centre on Amazon's use of algorithms and statistical models to calculate dynamic price caps for sellers' offers. When products are flagged as having prices deemed too high, they can be removed from the marketplace entirely, excluded from the prominent Buy Box display, or have their visibility restricted in search results.

According to the Bundeskartellamt, Amazon categorises offers into three groups: "pricing errors" are removed completely, whilst "significantly high prices" or "uncompetitive prices" are excluded from the Buy Box and face restricted display in search results.

The regulator argues these mechanisms interfere with sellers' freedom to set their own prices based on non-transparent platform rules. Mundt highlighted particular concerns about the discretionary nature of Amazon's pricing parameters and the lack of transparency in how price caps are determined.

"This is particularly the case when the sellers in question are no longer able to cover their own costs and the trading platform is being used to hinder the rest of the online retail trade in a way that is contrary to competition law," Mundt said.

Amazon strongly rejected the preliminary assessment. A company spokesperson said implementing such changes would harm both customers and selling partners.

"If Amazon is prevented from helping people find competitively priced offers, it will lead to a bad shopping experience for them, as we'd need to promote uncompetitive or even abusive pricing in our store," the spokesperson said. "This would mislead customers into thinking they're getting good value when, in reality, they're not."

The Bundeskartellamt previously designated Amazon as having "paramount significance for competition across markets" in July 2022, a decision upheld by Germany's Federal Court of Justice in April 2024. This classification subjects the company to extended abuse control provisions.

Amazon now has the opportunity to respond to the allegations before the regulator reaches a final decision. The case adds to mounting regulatory pressure on the Seattle-based company, which faces similar scrutiny from competition authorities across Europe and the United States over its marketplace practices and data usage.

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