German watchdogs promise 'instruments of torture' against Amazon

Efforts to protect competition have led German regulators to promise they will impose reform if Amazon refuses to bend its rules.

Germany's antitrust watchdog, the German Cartel Office, told German publication Sueddeutsche Zeitung that unless Amazon changed its rules when dealing with third-party merchants, the agency would hit back in full force in order to prevent competition from being undermined.

Andreas Mundt, the agency's president, said:

"Luckily, we have instruments of torture, which we will use if necessary. The terms of Amazon's Marketplace in effect obstruct competition. We are in talks with Amazon to eliminate these impediments to competition. If necessary, we will issue a crystal clear decree."

Amazon's Marketplace requires third-party merchants to offer their cheapest prices when selling over the platform, which the German watchdogs claim is a "competitive handicap" for other companies. For example, if a seller lists an item on both Amazon and eBay, the item on eBay will be more expensive -- proving to be anti-competitive for the online auction site and a benefit for Amazon, which enjoys advertising revenue and a higher amount of users.

Germany is Amazon's second-largest market outside of the United States, with sales last year of €6.5 billion ($8.9 billion).

In addition to problems in Germany, the online tech giant was placed under scrutiny by the G20 in July over its tax practices. The countries will attempt to push through patches which will prevent multinational firms like Amazon, Apple and Starbucks from rerouting profits -- albeit legally -- through subsidiaries in order to avoid hefty tax bills where they operate.

Via: Huffington Post

Image credit: ZDNet

This post was originally published on Smartplanet.com