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.”
For more see Business Insider, Axios, The Verge
I agree that this does not have much of an effect on brick-and-mortar stores. However the fact that Amazon continues to sell in their Marketplace under their name does indeed affect brick and mortar sales.
Amazon should not have it both ways. The idea of having a Marketplace and then undercutting it at the same time you profit from your customer/reseller/competitor in your Marketplace with your own products should not be allowed in the United States because it really does emphasize the need for unfair competition laws. Now if Amazon purchased companies that sell in their marketplace that continue to be operated separate from Amazon that is a different story.
But think about it …. Amazon charges you in every step of the selling and warehousing process. They profit from listing selling advertising shipping returning…. And then they have the gall to actually compete against the same companies who they profit from on the same products they profit from. That is the epitome of the reason why monopoly laws exist. Yes Amazon owns the marketplace. And stores have the right to sell in other marketplaces. However our government has the responsibility 2 fix or amend Monopoly law according to changing times.