Amazon has been accused by Germany's antitrust watchdog of undermining competition when dealing with third-party merchants. The watchdog recently told the German newspaper Sueddeutsche Zeitung that it would impose reform unless the Internet retail giant changes its rules.
Andreas Mundt, the president of the German cartel office recently told the paper, "Luckily, we have instruments of torture, which we will use if necessary.”
“The terms of Amazon's Marketplace in effect obstruct competition. We are in talks with Amazon to eliminate these impediments to competition...If necessary, we will issue a crystal clear decree," Mundt told the newspaper.
The watchdog’s big issue with Amazon is the requirement they have where third-party merchants must offer their cheapest price when selling their products over the platform.
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Amazon’s German operations have been plagued by a major dispute over employees' pay. A trade union has warned Amazon that employees could very well strike during the busy Christmas shopping season.
In a separate situation, Amazon has been highly criticized over its tax payments. Leading policy makers are calling on the new German government to crack down on tax avoidance by multinational firms. They want German leaders to take a stand without waiting for its European partners to act.
According to Amazon, unit growth from third party sellers in the U.S. jumped 40 percent in the 2012 holiday season.
Amazon has separate retail websites for United States, United Kingdom, France, Canada, Germany, Italy, Spain, Brazil, Japan, China, India and Mexico.
It is headquartered in Seattle, Washington. It is the world's largest online retailer. Amazon.com started as an online bookstore, but soon diversified. Jeff Bezos incorporated the company as Cadabra in July 1994 and the site went online as Amazon.com in 1995.
Amazon has yet to make a public statement on the issues.
Edited by Ryan Sartor