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The end of price parity – finally equality of distribution channels again

The Federal Cartel Office has closed the antitrust proceedings against Amazon because of the price parity clause.

“Without borders, all creativity is worthless” – some platform operators might have thought when they demanded “best prices” from the providers on their platforms. Not for themselves, but for consumers. Brand manufacturers may have secretly been quite happy with this practice. After all, they could rely on the fact that in many cases the price level on Amazon would not be undercut on other platforms or the retailer's own webshops, virtually secure minimum sales prices through the back door, without any antitrust violation of their own. If it hadn't been for the other platform operators who found these best price clauses a thorn in their side.

However, the Federal Cartel Office also felt this thorn when it initiated an examination of Amazon's so-called price parity clause at the beginning of 2013. Amazon had stipulated in its terms and conditions to retailers that they would not sell their products on other sales platforms and even in their own webshops at lower prices than on Amazon. Traders had turned against this – with success.

The retailers saw this as a disadvantage and an interference with their freedom to set prices. The Federal Cartel Office followed this view and threatened Amazon with an antitrust injunction if Amazon did not change its best prices clause. Amazon had already announced in August 2013 that it would delete the clause. When retailers confirmed to the Federal Cartel Office that they were no longer bound to this price parity, the Federal Cartel Office closed its antitrust investigation and thus the proceedings.

This gives retailers greater flexibility to offer their customers their products at differentiated prices on different sales channels.

However, a possible violation of antitrust law was not justified by the ban on the inadmissible setting of minimum sales prices. According to this, it is inadmissible for the seller or supplier to set minimum or fixed prices for its customers or to indirectly encourage them to adhere to a certain level when setting their resale prices. Such indirect influences include agreeing on a certain level of discount that the buyer may grant, threatening to stop delivery or even contacting us to not fall below non-binding recommended prices. Things were different at Amazon: On the one hand, Amazon did not set any minimum or fixed prices. On the other hand, Amazon is not the supplier of the products, but only a platform provider and therefore a service provider. The Federal Cartel Office saw the possible violation of antitrust law in the abuse of the strong position that Amazon holds on online sales platforms. Amazon may have prevented competition between online platforms through the price parity clause.

Best price clauses such as the price parity clause used by Amazon have now been put to rest. Other platform operators will therefore check their general terms and conditions for inadmissible restrictions on competition and eliminate them. Brand manufacturers may even have been happy with this practice in individual cases. After all, they could almost rely on the fact that in many cases the price level at Amazon would not be undercut on other platforms or the retailers' own webshops, so to speak minimum sales prices through the back door, without any antitrust violation of their own.

Brand manufacturers still have no choice but to convince their customers with quality, service and purchasing experience. Dealers can now breathe more freely with their pricing – until the next clause comes. There are no limits to creativity here either...

The current legal situation for traders who offer their goods and services in the EU, i.e. in various European legal systems, is – to put it carefully – confusing. Consumer protection has now been largely harmonized and will undergo further changes in Germany from June 13, 2014. However, each EU state still has its own regulations that are not regulated uniformly, for example in the area of general terms and conditions. The costs of having legal certainty in every EU state are associated with high costs, which particularly prevent small and medium-sized companies from boldly organizing sales throughout the EU.

The – planned – Common European Sales Law should apply in every EU state in addition to the respective national regulations and should not replace them. A corresponding choice of law is therefore necessary. The advantage is that legal uncertainty should be largely ruled out because this common European sales law applies equally in all countries. A high level of consumer protection is also guaranteed in this Common European Sales Law. However, this has the advantage for entrepreneurs that consumers are more likely to agree to a corresponding choice of law. In return, companies receive legal certainty for their sales.

It remains to be seen whether and how the member states will agree on the introduction of the Common European Sales Law, in particular whether it only applies to distance selling contracts. In addition, the important practical question of the legal enforcement of claims has not been answered. Entrepreneurs should nevertheless monitor developments in order to be up to date.

Dr. Christian Andrelang
andrelang law

Anwalt Gesellschaftsrecht und Handelsrecht

dr Andrelang, LL. M

Specialist lawyer for international business law

Specialist lawyer for commercial and corporate law


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