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Antitrust probe opened into Amazon over ’anti-competitive practices’

File picture: Reuters/Abhishek N. Chinnappa

File picture: Reuters/Abhishek N. Chinnappa

Published May 18, 2021

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Berlin - Germany's competition authority has opened an inquiry into online retail giant Amazon over potential "anti-competitive practices", using a new law giving regulators more power to rein in big tech companies.

On Tuesday, Federal Cartel Office head Andreas Mundt said his office was examining whether Amazon had "an almost unchallengeable position of economic power" and whether it "operates across various markets".

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If so, it would be deemed of "paramount significance", said Mundt, adding that the regulator could "take early action against and prohibit possible anti-competitive practices by Amazon".

"This could apply to Amazon with its online marketplaces and many other, above all digital offers," he added.

Under the amendment to Germany's competition law passed in January, the watchdog said it had more power to "intervene earlier and more effectively" against big tech companies, rather than simply punishing them for abuses of their dominant market position.

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The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny across the globe, including in the US, where Google and Facebook are facing antitrust suits.

The Amazon probe is only the second time that Germany's Federal Cartel Office has made use of its new powers, after first employing them to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

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The watchdog has two traditional abuse control proceedings open against Amazon.

One involves the company's use of algorithms to influence the pricing of third-party sellers on Amazon Marketplace, while another is probing the extent to which Amazon and major producers such as Apple exclude third parties from selling brand products.

In South Africa, the Competition Commission has started its Online Intermediation Platforms Market Inquiry.

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According to the commission, online intermediation platforms include e-commerce marketplaces, online classified marketplaces, software application stores, and intermediated services such as accommodation, travel, transport and food delivery.

The commission is on a mission to investigate and create new regulations in a bid to prevent the abuse of dominance by big firms.

E-commerce retailer Takealot was pin-pointed as dominant in the South African digital market.

The inquiry will focus on market features that may hinder competition among the online markets themselves, market features that may give rise to the discriminatory or exploitative treatment of business users as well as market features that may negatively impact the participation of SMEs, and firms owned and controlled by historically disadvantaged persons.

Agence France-Presse and IOL TECH

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