What: German regulators warn Amazon about potential violations of competition laws through its algorithmic price control practices that can remove or demote marketplace sellers based on non-transparent pricing parameters.

Why it is important: The case reveals growing regulatory scrutiny of digital platforms' market power, as Amazon's algorithmic controls over pricing and visibility can significantly impact seller autonomy and market competition, particularly given its dual role as both platform operator and competitor.

Germany's Federal Cartel Office has issued a warning to Amazon regarding its price control mechanisms for marketplace sellers, highlighting potential violations of both national and EU competition laws. The regulator's preliminary assessment focuses on Amazon's use of algorithms and statistical models to establish dynamic price limits, drawing from current, historical, and competitor data. When sellers exceed these thresholds, they face significant consequences including removal from the marketplace, exclusion from the prominent "buy box," and reduced visibility in search results. The case is particularly significant as Amazon operates as both platform provider and direct competitor to sellers. While Amazon argues these controls protect consumers from uncompetitive pricing, regulators emphasize the lack of transparency in how these limits are set and the broader implications for market competition.

IADS Notes: Recent market developments underscore the growing tension between platform governance and competition policy. In February 2025, the EU introduced comprehensive reforms making platforms liable for unsafe products, while simultaneously implementing new fees for low-value parcels. Amazon's response has been strategic, launching initiatives like "Haul" to compete with emerging rivals while maintaining strict platform controls. The company's dominance was particularly evident during the 2024 holiday season in France, where it led all e-commerce categories. However, regulatory pressure continues to mount, with both EU and US authorities increasingly scrutinizing platform practices that could unfairly disadvantage marketplace sellers.

German regulator warns Amazon on price controls