Amazon is defending itself at the Federal Court of Justice (BGH) against a decision by the Federal Cartel Office to take the online giant harder. But according to the cartel senate’s initial assessment, a new law is unlikely to violate either EU law or the constitution. The Karlsruhe judges wanted to make a final decision on this later. They might consult the European Court of Justice.
The presiding judge Wolfgang Kirchhoff referred on Tuesday to the “huge complexity of the case”. For the first time, the BGH is dealing with the subject. The background is a modernization and strengthening of competition law abuse control. In 2021, the Cartel Office received more powers from companies with cross-market influence and can prohibit them from practices that it believes endanger competition. This can also refer to markets where the companies are not (yet) dominant.
Last year, the Cartel Office classified Amazon as a company with “outstanding cross-market importance for competition”. Unlike in the past, the authority says it can intervene at an early stage as a result of the reform in order to keep markets open, promote innovation and protect consumer choice. For example, it can prohibit self-preference, i.e. giving preference to one’s own offers over those of competitors, the opening up of new markets – when it comes to quickly expanding one’s own market position in new markets, for example through bundled offers – and the exploitation of data power. While the Google mother Alphabet and the Facebook group Meta accepted a corresponding classification, Amazon and Apple filed a lawsuit.
“Central key player in the field of e-commerce”
A special feature is that the BGH decides directly on these complaints from companies and not, as is usually the case, first in the Düsseldorf Higher Regional Court. This should enable final court decisions to be made earlier. In the case of Amazon, the cartel office found in July 2022 that the group was a “key player in the field of e-commerce”.
Its offers as a retailer, marketplace, streaming and cloud provider, among other things, are linked to form a digital ecosystem. Amazon sees it differently. “The retail market in which Amazon operates is very large and extremely competitive, both online and offline,” said a spokesman. The German Retail Association estimated the total share of e-commerce in German retail sales to be only 13.4 percent in 2022. Amazon has invested 48.5 billion euros in Germany over the past eleven years, works closely with local research and employs more than 36,000 people.
Above all, the lawyers argued before the BGH that the new passage in the law against restraints of competition should have been submitted to the EU Commission before it came into force. In addition, he contradicts the requirements of the European law on digital markets. A representative of the cartel office countered that the EU was already aware of the German regulation when developing this law and took it into account. In addition, the procedures of the authority are very individual and related to concrete measures. From his point of view, only more generally applicable regulations are subject to submission. Judge Kirchhoff said the process could drag on for a while. Further negotiation dates are possible (Az. KVB 56/22).
The Apple case is pending at the BGH. At Microsoft, the cartel office initiated the examination at the end of March. Even before the change in the law, the Bonn authority had begun to examine whether Amazon might be influencing dealer prices and possible disadvantages for marketplace dealers through various instruments, such as agreements between Amazon and manufacturers that could exclude third-party dealers from selling (branded) products. Both procedures were expanded after the Cartel Office determined the cross-market significance.