An investigation has been launched against Amazon in the name of a new law to protect competition

An investigation has been launched against Amazon in the name of a new law to protect competition

By trusting a new law passed in January, officials are trying to find out if Amazon has a “primary priority in the markets,” allowing it to have “anti-competitive practices”.

The U.S. e-commerce company Amazon has been targeted by an investigation into “potential anti-competitive practices” in Germany, which passed in January under a new law that strengthens action powers against digital giants, officials announced Tuesday.

“The anti-federal cartel office has opened an investigation against Amazon based on new rules applicable to large digital companies,” the German competition official said in a statement.

Officials point out that Amazon wants to determine if it has “primary importance in the markets,” which allows it to have “anti-competitive practices,” he said. The U.S. panel was the first to be subject to the new German law, which was adopted earlier this year, strengthening the powers of competing authorities.

“Establishing a Barrier to Entry”

Once it has been proven that a company has an unequal place in many markets, the text allows for “immediate” restraining action. The law mainly targets digital giants, who are accused of exploiting a virtual monopoly in their operations. Previously, competing officials had to prove abuse of a dominant position before taking action.

“This applies to Amazon with its online sales platform and many other offers, especially digital,” Andreas Mund, head of the German anti-cartel office, was quoted as saying in a statement. The company said some Amazon practices, such as “setting an entry barrier” or “self-specifying its own services”, may be blocked.

The American social networking site Facebook has been targeted by an investigation launched under this new law since January. The other two actions of the German Genderme, which began before the law was changed, are ongoing to practices that are considered anti-competitive against Amazon. In 2019, the anti-cartel office pushed the U.S. company to change the conditions for its use of the site, listing its products to distributors.

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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