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Germany’s Mini-DMA Targets Amazon

Germany’s Mini-DMA Targets Amazon

July 31, 2025

Germany’s Federal Cartel Office (FCO) has issued a preliminary legal assessment finding that Amazon may have violated both Article 102 of the Treaty on the Functioning of the European Union and Section 19a of the German Competition Act. Section 19a introduces specific prohibitions for large digital companies deemed to have “paramount significance for competition across markets,” serving as Germany’s national version of the EU’s Digital Markets Act (DMA).

However, the FCO’s assessment is misguided, as it broadly conflates Amazon’s procompetitive discounting practices with anticompetitive conduct. Furthermore, this investigation conflicts with the DMA, which was specifically designed to regulate such conduct through uniform EU-level oversight rather than fragmented national enforcement. Ultimately, the FCO’s decision to circumvent the DMA and investigate Amazon undermines the harmonized regulatory approach the DMA intended to provide for large digital platforms within Europe’s single market, leaving firms vulnerable to conflicting national enforcement even when they comply with the DMA.

Claim 1: Non-transparent price filters restrict the competitive process

The FCO takes issue with Amazon Marketplace's pricing practices, specifically, how it determines access to its Buy Box. The Buy Box is the highlighted section on an Amazon product page that displays the default “Add to Cart” for a specific product, streamlining purchases by directing shoppers to a specific seller’s offer. To ensure users get an optimal offer, sellers are featured in the Buy Box based on an Amazon algorithm that weighs multiple factors, including price, fast and reliable shipping, and strong seller performance. According to the FCO, Amazon’s price filters—which limit the sellers in the Buy Box to those that set their price below a certain threshold determined by Amazon—are “not based on any objective, verifiable principles, nor are they made sufficiently transparent,” arguing that Amazon sets prices arbitrarily and in a way that ultimately “restricts the competitive process.”

The FCO does not argue that Amazon’s price filters exclude rivals or preference Amazon’s products. That said, the claim that Amazon fails to apply objective criteria in setting its filters raises a consumer protection question at most, not a competition issue. Indeed, instead of restricting the competitive process, Amazon’s price filters apply equally and without discrimination to all sellers, including Amazon itself. The FCO’s claim that Amazon does not use "any objective principles" is also plainly false: Amazon uses several benchmarks, including a product’s sales history, MSRP, reference pricing, and comparable listings from reputable retailers. In fact, Amazon has strong pro-consumer reasons not to fully disclose its algorithms, as sellers could game the system to artificially win the Buy Box rather than competing on price and service.

Claim 2: Price filters force sellers to price below cost and exit the market

The FCO also argues that Amazon’s price filters effectively result in price caps, including for featured offers, that limit a seller’s ability to charge what they want. In particular, the FCO appears to be concerned that Amazon’s price caps have the effect of coercing sellers to excessively lower their prices, which in turn “often mean[s] that sellers are unable to cover their costs, putting them at risk of having to leave the Marketplace” or not be featured in the Buy Box. The FCO suggests this could lead to a “higher level of concentration on the Marketplace,” as sellers who cannot meet the standards set by the price filters have a reduced ability to compete.

There are several problems with the FCO’s attempt to protect less efficient sellers on Amazon. To be sure, while price caps may reduce some sellers’ margins and even force some sellers to exit the market, this would at most reflect a sort of exploitation theory of harm, not exclusionary behavior by Amazon that increased its market power. Indeed, the exit of inefficient sellers should not affect competition between efficient sellers. Generally, Amazon has little strategic incentive to exclude third-party sellers: Over 60 percent of sales on its German platform come from independent sellers, from which Amazon earns commissions. What’s more, price filters also help protect German shoppers from price gouging, thereby reinforcing consumer trust in the platform and attracting more sellers to Amazon. In effect, while price caps may compress margins on the seller side, they simultaneously benefit consumers with lower prices—ultimately enhancing, not harming, the competitiveness of the platform overall.

Claim 3: Price matching discourages competing retailers from lowering prices

The FCO’s final concern is that Amazon “coordinate[s] Marketplace prices based on Amazon’s own pricing principles and ideas.” Specifically, the FCO accuses Amazon of coordinating prices to systematically match the lowest prices offered by competing online sellers. This claim echoes the U.S. Federal Trade Commission’s complaint against Amazon’s so-called “anti-discounting practices,” which ITIF has previously critiqued. According to this theory, the threat of Amazon’s retaliatory discounts discourages other retailers from attempting to lower prices, thereby ultimately raising prices across the market by facilitating collusion. But this theory is internally inconsistent. The FCO is simultaneously accusing Amazon’s price filters of keeping prices too low (forcing seller exits) and also keeping them too high (facilitating collusion)!

In bringing such a claim, the FCO ignores that Amazon’s practices—monitoring rival prices and adjusting accordingly for consumers—are tantamount to standard retail competition, which is why U.S. courts have never found such a practice to be anticompetitive. Indeed, it is unclear what remedy the FCO could even propose here, short of requiring Amazon to abstain from the very price competition that results in lower prices for German shoppers. Moreover, while collusion can constitute legitimate anticompetitive behavior, it’s highly unlikely here. The idea that Amazon could coordinate prices across the vast number of markets and sellers on its German platform is not only incredibly overbroad—it’s also highly implausible, if not impossible as a practical matter, given the sheer number of independent sellers and diversity of the Marketplace.

Conclusion

Fundamentally, the FCO’s case misinterprets Amazon’s procompetitive measures to promote vigorous price competition as anticompetitive conduct and prioritizes the protection of inefficient sellers over the interests of German consumers. Worse still, pursuing this case under Germany’s national version of the DMA threatens to fragment Europe’s digital market—potentially subjecting Amazon Germany to different rules than, for example, Amazon France, despite both operating within the EU’s so-called single market. It also risks deepening tensions between EU and member state authorities over competition enforcement in digital markets.

Germany’s action against Amazon reflects yet another unsubstantiated antitrust attack from Europe on a U.S. tech firm, which risks further straining transatlantic tensions at a time when cooperation on trade, technology, and security is crucial.

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