Germany’s competition watchdog has turned a familiar retail feature into an antitrust offense. In a recent decision, the German Federal Cartel Office (FCO) effectively faulted Amazon for showing shoppers only “price-competitive” offers on its German site.
At first glance, the case looks narrow—a dispute over the mechanics of the “Buy Box,” reminiscent of European actions against so-called “most-favored-nation” (MFN) clauses. In substance, it signals something broader. The decision illustrates two recurring problems in contemporary European competition policy.
First, the FCO privileges speculative theories of harm over observable market effects. Second, national authorities increasingly pursue aggressive ex ante interventions that risk fragmenting the EU’s single market, rather than harmonizing it.
Amazon’s Offense: Showing Consumers the Deal
At the center of the FCO’s case lies a simple claim: Amazon’s ranking algorithms exclude offers from the Buy Box when the listed price is too high.
In a competitive market, that feature would ordinarily draw praise. Platforms that steer consumers toward lower-priced offers intensify price competition—one of the primary channels through which consumer welfare improves.
The FCO objects to exactly that mechanism. Its concern is not excessive prices, but the possibility that Amazon’s efforts to keep prices low could disadvantage some sellers or discourage rival platforms.
The agency grounds its theory in an analogy to MFN clauses. If Amazon demotes sellers who charge less on other marketplaces, the argument goes, the platform creates a de facto MFN. Sellers, fearing reduced visibility, may avoid discounting elsewhere, insulating Amazon from inter-platform price competition and raising entry barriers for competing marketplaces.
Economic literature recognizes that actual MFN clauses—especially “wide” MFNs—can soften competition under specific conditions. The FCO extends that theory beyond those limits. A contractual prohibition on lower prices elsewhere is economically and legally distinct from a platform’s decision to highlight the most competitive offers for its users.
The decision thus reflects what Harold Demsetz called the “Nirvana Fallacy.” The authority identifies hypothetical harms while overlooking the real-world costs of intervention, including reduced price competition.
The remedy underscores the point. This is not a routine MFN case addressing a contractual restraint. The FCO is effectively redesigning Amazon’s product-ranking system, requiring the company to reduce or remove price competitiveness as a central ranking variable to determine which products consumers see.
Helping Sellers by Hurting Shoppers
The intervention carries clear implications. Like other large digital platforms, Amazon attracts users through a combination of a seamless user interface, reliable logistics, and—most importantly—competitive pricing.
That reputation does not arise by chance. Amazon’s ranking algorithms sort offers to highlight the best deals. Remove the ability to filter out noncompetitive or overpriced listings, and the platform’s value proposition weakens. Consumers will encounter higher-priced products more often. They would then either incur higher search costs to find bargains or become more likely to purchase inferior deals. The decision also dampens seller price competition, further reducing consumer welfare.
The policy logic produces an obvious paradox. By limiting Amazon’s capacity to showcase low prices, the regulator risks harming the consumers it is charged to protect. The primary beneficiaries are rival platforms and less-efficient sellers, which would now face weaker competitive pressure.
The result looks less like competition enforcement than competitor protection. The intervention shields firms from price rivalry, rather than protecting the competitive process, and it shifts the focus of competition law away from consumers and toward rivals.
A Pan-European Platform, Twenty-Seven Rulebooks
The decision raises a second, more structural concern: the integrity of the European Single Market. The FCO is a national regulator, but its ruling does not stop at Germany’s borders.
Amazon.de serves far more than German shoppers. Consumers across multiple EU member states rely on the platform to purchase goods unavailable in their domestic markets. By regulating the design of a pan-European platform under national law, the FCO effectively exports its regulatory preferences beyond its jurisdiction.
That approach creates predictable legal and compliance problems. If Germany can dictate algorithm design to protect hypothetical rivals, other national authorities can do the same. French, Italian, or Spanish regulators could impose conflicting obligations on the same platform. The result would be overlapping investigations, incompatible mandates, and sharply higher compliance costs, along with legal uncertainty that deters investment and innovation.
This outcome conflicts with the EU’s own economic strategy. Mario Draghi’s recent report on European competitiveness identified market fragmentation as a central weakness of the EU economy. Digital markets depend on scale, and the Digital Single Market promised firms a unified rulebook across the union.
National interventions push in the opposite direction. Platforms now have incentives to silo operations—separate storefronts, separate compliance systems, and country-specific back-end infrastructure—to manage regulatory risk. Fragmentation makes European digital markets less efficient and less attractive than their U.S. or Chinese counterparts.
A jurisdictional tension also emerges. The FCO’s decision sits uneasily alongside Amazon’s prior settlement with the European Commission and its obligations under the Digital Markets Act (DMA), which seeks EU-wide consistency in digital-platform regulation. The DMA states:
A number of regulatory solutions have already been adopted at national level or proposed to address unfair practices and the contestability of digital services or at least with regard to some of them. This has created divergent regulatory solutions which results in the fragmentation of the internal market, thus raising the risk of increased compliance costs due to different sets of national regulatory requirements…
Therefore, the purpose of this Regulation is to contribute to the proper functioning of the internal market by laying down rules to ensure contestability and fairness for the markets in the digital sector in general, and for business users and end users of core platform services provided by gatekeepers in particular…
Fragmentation of the internal market can only effectively be averted if Member States are prevented from applying national rules which are within the scope of and pursue the same objectives as this Regulation.
By intervening in an area the Commission already regulates—and in a manner that diverges from Amazon’s settlement—the FCO signals that compliance with EU law may not suffice. National authorities remain free to layer additional, idiosyncratic obligations atop a nominally harmonized framework.
A coherent system would place cases involving core platform functions and cross-border effects within the European Commission’s primary jurisdiction, ensuring consistent rules and union-wide consumer-welfare analysis. Instead, competition policy is drifting toward re-nationalization, with national agencies advancing novel theories of harm in high-profile technology markets without accounting for systemwide consequences.
The result is a competition regime increasingly at odds with its own aims. A competition authority penalizes aggressive price competition based on speculative deterrence of rivals, while national enforcement fragments the internal market and conflicts with EU-level commitments. It is European consumers who will bear the costs through higher prices and a less integrated digital economy.
