Amazon Eases Rule on Prohibiting Third-Party Sellers from Charging Lower Prices on Other Sites
Amazon on Monday reportedly ended a practice that prohibited sellers on its marketplace from listing the same products for cheaper prices on other platforms, a move that seems to address antitrust concerns surrounding a company that commands approximately half of all U.S. e-commerce sales.
The Seattle-based shopping behemoth has faced questions over unfair or monopolistic practices in both the U.S. and Europe. Last fall, European Competition Commissioner Margrethe Vestager began looking into whether Amazon gleaned data from the sellers on its platform just to use that valuable information to compete with these smaller merchants directly — often undercutting them on price.
Though talk of antitrust action has dogged Amazon for years, scrutiny of its practices and policies has come under the national spotlight recently, thanks to pressure from high-profile political players like 2020 presidential hopefuls Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.) on issues ranging from wages and warehouse conditions to breaking up Big Tech altogether. In November, President Donald Trump also mentioned that his administration would look into whether Amazon, along with Facebook and Google parent company Alphabet, were in violation of antitrust regulations.
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Sen. Richard Blumenthal (D-Conn.) ratcheted up concerns with a December 2018 letter to Assistant Attorney General Makan Delrahim that said Amazon’s so-called “price parity” rule “could stifle market competition and artificially inflate prices on consumer goods.” Noting that European bodies downvoted Amazon’s price-parity rules a half decade ago, Blumenthal requested that the U.S. take similar action and launch its own antitrust investigation to ensure a level playing field in the marketplace.
Alluding to Walmart’s use of its own price-parity requirements, the letter said, “The use of multiple price-parity provisions throughout the e-commerce industry raises concerns that these clauses may collectively work to block competition and raise prices in violation of Section 1 of the Sherman Act.”
Reports indicated Amazon would command roughly 50 percent of total U.S. e-commerce sales by the close of 2018. eMarketer data from November shows that 31.8 percent of those sales stems from Amazon’s marketplace, dwarfing the 16.7 percent of sales directly between Amazon and consumers.
Amazon did not immediately respond to a request for comment.
Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.
