Germany’s antitrust watchdog is investigating Amazon.com Inc. to determine if the company has abused its dominant market position by fixing prices of products sold on its website there.

The probe, led by Germany’s Federal Cartel Office, is looking into the company’s relationship with third-party sellers that use its platform. The investigation is said to have begun in April, and follows several complaints, Reuters reported.

Andreas Mundt, the president of the Federal Cartel Office, told the International Business Times that his agency is currently investigating “whether and how Amazon influences the price-setting of third-party traders on the marketplace.”

He said that since the start of the coronavirus pandemic, which led to a big surge in online sales, his agency had received a number of complaints that Amazon had blocked some traders because of their allegedly excessive prices for certain products.

The complaints are said to be related to sellers of products such as face masks and hand sanitizer, which saw a massive increase in demand earlier this year. The implication is that Amazon was effectively forcing sellers to offer these products at lower prices on its platform than they do on rival marketplaces.

“Amazon must not be a price controller,” Mundt told IBT. “This applies even now.”

An Amazon spokeperson said in a statement to Gizmodo that it does not engage in price fixing, and that sellers on its platform “set their own product prices in our store.”

“We want customers to buy with confidence anytime they make a purchase on Amazon.de and we have policies to help ensure selling partners are pricing their products competitively,” the spokesperson said. “Our systems are designed to take action against price gouging. If selling partners have concerns, we encourage them to contact our selling partner support.”

News of the German investigation comes just days after Canada’s Competition Bureau said it will launch its own probe into whether or not Amazon is influencing competition and harming customers and competitors.

The bureau said last week its investigation will look at both past and existing Amazon polices that might impact third-party sellers and their willingness to offer products for sale at a lower price through other retail channels.

The allegations against Amazon are quite serious, as price fixing is a big red flag for any regulatory agency that’s concerned with the abuse of monopoly power, analyst Rob Enderle of the Enderle Group told SiliconANGLE.

He explained that price fixing generally involves vendors agreeing to preserve profit margins by setting a minimum price for their products, and effectively amounts to a kind of “illegal tax” on consumers. He said that governments worldwide are not exactly big fans of this practice.

“As competitors, you are not allowed to collude on price,” Enderle said. “Germany tends to be very pro-consumer, so the penalties for Amazon, if it is found guilty, could be dire.”

The problem for Amazon is that if it’s found guilty of colluding on prices in one country, things could quickly escalate as other nations look to emulate those actions.

“Once you are branded as a monopoly that breaks the law, you are effectively guilty until proven innocent for subsequent antitrust actions that may have nothing to do with this one,” Enderle said. “Expect Amazon to fight this aggressively as a result. This kind of thing crippled IBM and Microsoft for a while and resulted in the break up of RCA and AT&T, so Amazon is at serious risk if it is found guilty.”

Amazon is also braced to fight separate antitrust charges by the European Union, relating to its treatment of third-party merchants that use its platform. It’s claimed that Amazon accessed sales data from third-party sellers to help it develop competing private-label products, in violation of its own corporate policies.

Photo: Amazon