Amazon has been hit with a €59 million (A$70 million) fine in Germany after regulators ruled the tech giant unlawfully interfered with how third-party sellers set prices on its marketplace.

Germany’s Federal Cartel Office, Bundeskartellamt, found Amazon used algorithmic pricing tools and internal policies to influence the prices charged by independent sellers, many of whom directly compete with Amazon’s own retail business.

The regulator ordered Amazon to largely stop using these tools, saying they breach both German and EU competition law.

At the centre of the case are Amazon’s so-called ‘fair pricing’ mechanisms.

According to the regulator, if Amazon’s systems determine a seller’s price is too high, the platform can remove the listing altogether or sharply reduce its visibility.

Products may be excluded from the prominent ‘Buy Box’ or pushed into less visible sections such as ‘Other buying options’, significantly cutting sales.

“Amazon competes directly with marketplace sellers on its platform and influences the prices of its competitors, including through price caps,” said Bundeskartellamt president Andreas Mundt. “This is problematic from a competition standpoint.”

The watchdog said Amazon should only be allowed to intervene in “exceptional cases”, such as extreme or abusive pricing.

Otherwise, Mundt warned, Amazon’s approach risks letting the company “control the general price level” on its platform, potentially forcing third-party sellers to operate at a loss or exit the marketplace altogether.

Third-party sellers account for roughly 60% of products sold on Amazon, making the issue particularly significant for competition and consumer choice.

Amazon said it will appeal the decision and continue operating as usual while preparing its legal challenge.

Rocco Bräuniger, Amazon’s country manager for Germany, described the ruling as unprecedented, arguing it would force Amazon to promote uncompetitive prices to customers.

“This makes no sense for customers, sales partners or competition,” Bräuniger said, adding the decision could stifle innovation across the European Union.

The €59 million fine represents only a partial penalty, based on the economic benefit Amazon allegedly gained from the practices.

The regulator noted the conduct is ongoing, meaning further penalties are possible.