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Amazon Faces Probe in Europe Over Third-Party Selling

By Sam Schechner 

BERLIN -- Amazon.com Inc. has agreed to change the terms of service on its platforms for third-party sellers around the world, following an investigation in Germany into the e-commerce giant's practices in its fast-growing marketplace segment.

The settlement marks the conclusion of an eight-month probe by the German Federal Cartel Office, which along with counterparts in the European Union has stepped up oversight and regulation of large U.S. tech giants in recent years.

The European Commission and such competition authorities as those in Austria and Italy are investigating Amazon on various topics, including the treatment of third-party sellers, and whether the e-commerce company's collection of data about transactions gives it an unfair advantage over others who sell on its platform.

In a settlement announced by the German regulator, Amazon is set to amend certain terms for its marketplace platform, including assuming some liability for third-party sales, offering sellers 30 days' notice of account suspensions, and reducing its requirements around confidentiality terms for sellers.

In a statement, Amazon said it had "constructive" discussions with the German regulator and is making changes to its terms "to clarify selling partner rights and responsibilities."

The changes satisfy what Federal Cartel Office President Andreas Mundt said were "numerous complaints" from Amazon sellers.

"They concern the unilateral exclusion of liability to Amazon's benefit, the termination and blocking of sellers' accounts, the court of jurisdiction in case of a dispute, the handling of product information and many other issues," he said in a statement.

The changes are scheduled to take effect in 30 days, according to the regulator. Amazon's third-party marketplace has eclipsed its primary retail arm as the largest share of sales, at 58% in 2018, according to Chief Executive Jeff Bezos' annual letter to shareholders in April.

Germany is Amazon's second-largest sales market behind the U.S., with $19.9 billion in sales in 2018, according to the company's annual filing. Its German third-party marketplace had more than 300,000 active sellers last year, and it accounted for between 40% and 50% of volume sales across all five Amazon third-party marketplaces in Europe.

Write to Sam Schechner at sam.schechner@wsj.com

 

(END) Dow Jones Newswires

July 17, 2019 06:00 ET (10:00 GMT)

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