Amazon.com, Inc. (NASDAQ:AMZN) faced fresh regulatory pressure in Germany on Thursday as investors awaited its quarterly report after the bell.
Germany’s Bundeskartellamt said it barred Amazon from steering marketplace seller prices through routine price policing.
What Investors Watch
Amazon is set to release fourth-quarter results after the bell on Thursday. Wall Street expected earnings per share of $1.97 and revenue of $211.30 billion. UBS kept a Buy rating on Feb. 3 and nudged its price forecast from $310 to $311.
What German Regulators Targeted
The authority focused on pricing tools inside the German Amazon Marketplace.
Amazon sells directly through Amazon Retail and also hosts third-party sellers. The release said third-party merchants account for about 60% of units sold on amazon.de.
The agency said Amazon used checks that flagged offers as overpriced. It said Amazon then removed listings or limited Buy Box visibility.
The authority warned that reduced visibility can quickly cut seller sales. Andreas Mundt, the agency’s president, said Amazon competes against sellers on its own platform.
“Amazon directly competes with the other Marketplace sellers on its platform. Therefore, influencing its competitors’ pricing, including through price caps, is only permissible in the most exceptional cases, such as in the event of excessive pricing,” Mundt said according to the report.
The authority also faulted unclear rules behind price caps and seller notices. It said sellers could not reliably predict when Amazon would limit or remove offers.
“We are not taking action against Amazon’s goal of offering end consumers the lowest prices possible. However, price control mechanisms are not necessary to achieve this goal.”
Amazon can appeal within one month to the Federal Court of Justice. According to the report, the agency said it coordinated with the European Commission on Digital Markets Act enforcement.
Amazon Price Action: AMZN shares are trading lower by 4.19% to $223.26 at last check Thursday.
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