The Federal Cartel Office said it would look closely at Amazon's business practices after receiving "many complaints" from retailers and manufacturers selling goods through its German website amazon.de.
"Its double role as the largest retailer and largest marketplace has the potential to hinder other sellers on its platform."
The probe is the latest setback for Amazon after the European Commission in September opened a preliminary investigation into suspicions the retailer uses the data it has about its third-party sellers to gain a competitive edge.
The German watchdog said it would examine Amazon's "terms of business and practices towards sellers", including taking a closer look at rules for product reviews, use of data and the "non-transparent" blocking or closing of sellers' accounts.
In a statement to AFP, Amazon said it could not comment on ongoing proceedings.
The company pointed out German SMEs had sold 2.1 billion euros (USD 2.4 billion) in goods around the world through Amazon last year.
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