Amazon has quietly ended is price parity policy that prohibited its 3rd party marketplace vendors from selling elsewhere on the Web at a cheaper price, according to Axios and other news outlets.
In the past, Company ABC, selling widgets on Amazon’s marketplace, could not sell them cheaper on eBay or Alibaba, for example, under Amazon’s contracts.
Many news outlets speculated that Amazon ended the practice due to possible antitrust violations. Axios pointed out that Senator Richard Blumenthal of CT, in December called for an investigation by the Dept. of Justice and the Federal Trade Commission into possible antitrust violations by Amazon.
Amazon stopped the practice in Europe in 2013, responding to regulatory pressure by the EU.
Business Insider wrote, “Terminating this policy removes this major advantage for Amazon and could alter the e-commerce landscape as the e-tailer loses its iron grip on minimum prices for many products.”
One car audio supplier said that many third party resellers skirted the policy by selling under different names. He added that Amazon had difficulty policing the policy “By taking this out of the contract, they are able to avert an antitrust action that would be extremely costly to defend for a policy that is largely unenforceable.”
He said, “It really does not have a favorable impact on bricks and mortar since now there is totally open pricing in all Internet reseller marketplaces.”