#antitrusts

Sellers on the Amazon marketplace allege the company's marketplace favors Amazon private label brands over independent sellers. The world's largest internet company in the world, Amazon, is being investigated for monopoly power abuse in Germany. While Amazon has long cornered the market for online shopping, governments have been hesitant to challenge the retail giant's power, until now. Germany is Amazon's second largest market after the US. Amazon marketplace users in Germany who sell products on the site have complained that the company uses its power to give its own product listings an unfair advantage. The complaints have sparked an investigation into the alleged abuse of its position by Germany’s antitrust agency. According to Bundeskartellamt, or the Federal Cartel Office, Amazon may be involved in several unethical practices. These practices include blocking seller accounts with no explanation, misuse of seller information and withholding payments. In fact, the office received many complaints about the treatment of third-party sellers, the bureau said in a statement. Andreas Mundt, the Federal Cartel Office president, said, “Because of the many complaints we have received we will examine whether Amazon is abusing its market position to the detriment of sellers active on its marketplace. We will scrutinize its terms of business and practices toward sellers.” The German investigation comes as the European Union's Competition Commission is already investigating Amazon’s use of data to the possible disadvantage of marketplace sellers.

Sellers Allege Amazon Favors its Own Private Label Brands

One company has taken Amazon to court over it's alleged unfair marketplace practices. Ella Moss, a Los Angeles-based clothing company, sued Amazon for favoring Amazon's own private label clothing line "Ella Moon" over Ella Moss products in algorithms and search results. Ella Moss alleges that Amazon creates private label products that look like or are similarly named and priced as existing brands in an attempt to confuse costumers into buying Amazon's private label products. Amazon has approximately 100 private label brands with thousands of products. According to a New York Times report, "few of those are sold under the Amazon brand. Instead, they have been given a variety of anodyne, disposable names like Spotted Zebra (kids clothes), Good Brief (men’s underwear), Wag (dog food) and Rivet (home furnishings)." In an example of Amazon's success with private-label, after just three years Amazon's private label battery brand outearned both Energizer and Duracell in online sales. As the New York Times report revealed the success of Amazon's battery line may be due to its marketplace manipulation. If a user asks Amazon's Alexa to buy batteries, users are only presented with one option - to buy AmazonBasics batteries. “I think there is a potential monopolization case against Amazon,” said Chris Sagers, an antitrust professor at the Cleveland-Marshall College of Law in Ohio, to the New York Times. “The Amazon marketing people are geniuses. They’re brilliant,” Mr. Sagers said. “But if they are getting massive penetration in the market and preventing customers from buying products from their competitors? Well, it’s like they’re writing the plaintiff’s complaint for them.”

How Did Amazon Get So Big?