Canada and Germany Add to Amazon’s Antitrust Woes

Posted on August 17, 2020 by Paul Thurrott in Amazon with 11 Comments

Canada and Germany have both launched separate antitrust investigations into Amazon’s business practices related to third-party sellers on its e-commerce site.

“The Bureau is examining whether Amazon is engaging in conduct on its Canadian marketplace, Amazon.ca, that is impacting competition to the detriment of consumers and companies that do business in Canada,” a Canadian Competition Bureau announcement reads. “The Bureau is conducting its investigation under the restrictive trade practices provisions of the Competition Act, with a focus on potential abuse of dominance.”

The Competition Bureau is specifically looking at Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels, such as their own websites or other online marketplaces; the ability of third-party sellers to succeed on Amazon’s marketplace without using its “Fulfilment By Amazon” service or advertising on Amazon.ca; and any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.

The German investigation is similar but is focused on price-fixing.

“We are currently investigating whether and how Amazon influences how traders set prices on the marketplace,” Andreas Mundt, president of Germany’s Federal Cartel Office said. “Amazon must not be a controller of prices.”

Amazon says it blocked some third-party sellers for price-gouging during the pandemic and that it does not set prices.

“Amazon selling partners set their own product prices in our store,” an Amazon statement explains. “Our systems are designed to take action against price-gouging.”

The two cases join a long string of regulatory interest in Amazon on both sides of the Atlantic. In Europe, the European Commission is expected to file charges against Amazon related to its relationships with third-party sellers. And in the United States, the states of New York and California, the Federal Trade Commission, the Department of Justice, and the House Judiciary Committee are all examining Amazon’s business practices.

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Comments (12)

12 responses to “Canada and Germany Add to Amazon’s Antitrust Woes”

  1. Avatar

    JH_Radio

    As a consumer, Amazon is just easy and works. I'd hate to think of what it'd be like to have an acount on every single one of the sites I've ever baught from if it was all the sellers sites. As it is there are too many accounts all over the web.

    • Avatar

      wright_is

      In reply to JH_Radio:

      Yes, but are you getting a good deal? It isn't just about convenience, it is also about competition and also what those other resellers are allowed to do and whether Amazon unfairly promotes itself instead of them (i.e. a product starts selling well, so Amazon bury it and offer their own-brand version). Are you being best served, if Amazon buries the products you are looking for and offers their own-brand version instead?

      Given that the Amazon own brands aren't really that bad, then it probably isn't too bad a deal for you, but you still aren't getting what you are looking for. And for the original manufacturer/retailer, it is definitely a bad deal.

      There have been various anecdotes of this happening over the years. If Amazon really did suppress the competition in favour of its own products, that is one area where they could be in hot water.

  2. Avatar

    rsfarris

    Serious question: They mention 'price-gouging,' specifically, but is anyone looking into bots and product scalping? I'm thinking specifically about collectibles, especially limited edition video game consoles and similar products. The past several years have been horrific if you don't manage to snag something in a pre-order. If anyone doesn't know what I'm talking about search for Star Wars Black Series figures or, I don't know, the Spider-man PS4 Pro on Amazon (that last one might be far enough back that there aren't even any out there).

  3. Avatar

    ghostrider

    About damn time. Amazon are not a nice company. They treat their staff terribly and their online re-sellers worse. So many fake products and reviews, discriminatory pricing, and a class-leading customer lock-in program called Prime.


    Do not order anything else from Amazon. Advise people you know not to use them. They're killing the marketplace and destroying all the small players who are fighting for survival as it is. Bezos does not need any more of your money!

    • Avatar

      dftf

      In reply to ghostrider:

      I do like Amazon for the convenience of having items sent to a Locker, but I do also frequently still shop locally, going in many different stores.


      I'm sure many people would use more local shops if they actually did delivery: only due to the pandemic have some UK supermarkets finally just decided to do home-deliveries, and for local "mom-and-pop" stores, some are using things like Deliveroo for select products.


      Personally, I'd love a website where loads of local shops list their items, I could add what I want into one basket and then a rider collects it all and drops it in one delivery. If online is the way things are heading, indie shops and small local stores need to think how they can adapt, like how I suggested there.


      Same argument we've heard before about council-licenced taxis versus Uber -- if many people like the convenience of using an app to order a taxi, what is stopping some of the other private firms having their own apps? And if not their own individual ones, why not collectively all set one up and it randomly chooses any nearby taxi from any of the companies on there for each request to evenly spread the money around?


      While I do agree Amazon does need investigating for some things, like with the taxis-versus-Uber, a lot of it boils-down to "we-don't-want-to-change-so-force-them-to-work-like-us".

  4. Avatar

    waethorn

    When are people going to realize that Jeff Bezos is just emulating the AliExpress business model replete with cheap Chinese imports?

  5. Avatar

    dftf

    "[...] the ability of third-party sellers to succeed on Amazon’s marketplace without using its “Fulfilment By Amazon” service"


    Personally-speaking I love "Fulfilment by Amazon" as it means (1) I can have items sent to my nearest Amazon Locker (well, mostly: occasionally I get the odd item which can't be sent, even though it's not in a restricted category) and (2) you deal with Amazon for customer-service, not the seller.


    "Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels"


    Imagine they mean something different but Amazon UK does have a "Tell us about a lower price" link on each page where you can submit a URL to a page where the same item can be found cheaper. But again, this is not Amazon-specific: many UK chain stores offer some-sort of "price-match" where if you find it cheaper within something like 30 days they'll refund the difference.


    "any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers."


    Ah yes, the "Amazon Basics" range. I could count on one-hand the number of items I've ever purchased from it, and I do wonder how it is any different from most UK supermarkets. You have the brand-name products, going-up-against the supermarkets' own standard range, but also their budget/economy range and their premium/deluxe range. The standard-range often feature packaging or labelling very-similar in-design to the big-brands (especially in categories like cereal, sodas, candy and frozen/tinned goods), and each supermarket clearly gets data from each customer on what they buy, how much and how often, and so can bring out competing products where it would make sense. Is what Amazon does here much different to any large retailer?

    • Avatar

      wright_is

      In reply to dftf:

      Not just Amazon Basics. They have something like 40 "house brands", just like Aldi and Lidl, a majority of their own products don't have the company name, but some fantasy brand name (E.g. not Lidl Tea, but Nelson Tea, Alesto nuts, Milbona dairy products etc.).

      Solimo, Presto!, Wag, Mama Bear, Wickedly Prime, Good Threads, just to name a few Amazon brands.

      • Avatar

        dftf

        In reply to wright_is:

        Ah, interesting: virtually everything I've bought from Amazon I know is a "big-brand" not owned by them, but interesting to know they use other brands too.


        Many UK supermarkets already do this too, notably Tesco, with examples including: "Butcher’s Choice"; "Hearty Food Co."; "Nightingale Farms"; "Springforce"; "Stockwell & Co"; "The Growers Harvest" and "Willow Farms".


        Assuming there is no tax-reasons for doing this, I do wonder if it makes-sense as a strategy: if you like a particular store, would you not be more-encouraged to try a brand clearly labelled as that supermarket rather than a pretend other name? And as you may not associate these "house brands" as being owned by the parent, if you did like them, positivity won't then go towards the supermarket itself if people don't know the link.


        I'm sure there must be psychological research to backup this approach, but it does seem odd to me to want to pretend some successful products aren't your own...

  6. Avatar

    dftf

    As an aside, I wish there'd be an investigation into eBay: much-worse experience than Amazon, from a customer-standpoint:


    (1) If you filter items by "location: my country only" you still get loads of ones that will ship from China, as sellers lie about the item location and it's only by scrolling-down and checking the "registered business address" you get the true picture.


    (2) When doing a "Buy It Now" many sellers say "no returns or refunds", even though under UK law you have to do allow a return and refund within 14 days after purchase, and no reason for return is required. (The item must be in the same condition, and it does exclude some items, such as anything that can be copied, like books, CDs, DVDs, or custom-made items, unless they are faulty, not simply as you don't like them).


    (3) It's a minefield of stupid results, as sellers try to race to the top of the "Sort by price: Low to High" list by offering a "sample" product really cheap but hiding the true-cost in a dropdown. I also wish they would also just include the P&P cost in each item, not have results like "£7.50", "£7.70" then "£5.40 (+ £2.50 P&P)". Just list the last-one as £7.90 so they all look-consistent.


    (4) If you have an issue with a seller, even if they are in the wrong, they can leave you negative feedback as a buyer.


    (5) The mobile-version of the website hides some key information by-default, such as the seller's business address, the item description, and if an item is offered "for collection only" (hence why people often add this into the item photo).


    Honestly, there may be some legal or back-end stuff with Amazon to deal with, but with eBay there are tons of front-end stuff I wish they'd fix...

    • Avatar

      wright_is

      In reply to dftf:

      I agree totally. In conjunction with PayPal, fleaBay and ScamPal seem to ensure that if you buy from a dodgy seller, you lose. If you sell to a dodgy buyers, you lose.

      Looking at the regular entries in c't magazine's "Vorsicht Kunde" (Buyer beware) column, it seems that eBay and PayPal are there at least once a quarter, having loused some transaction and let a crook get away with the goods/money, while leaving an innocent c't reader holding the pieces. They usually apologise, refund the reader and promise to do better in the future, until the next complain a couple of months later.

      They are also constantly in the news for counterfeit products, whether it be 128mb "2TB" USB sticks, or this week, cheap Chinese 2.5" USB hard drives with 2TB capacity (in reality, a 2008 Hitachi 320MB drive with the labels ripped off).

      A colleague tried to sell his ultrabook (bought in January, but replace by a gaming notebook a couple of months later). He stated Germany only for the sale and delivery, somebody hit the buy-now button and wanted it delivered to the UK! And it turned out to be a con-artist.

      My daughter uses eBay small-ads to buy and sell cheap items in the local area, which seems fairly reliable.

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