Amazon Stops Strict Price Controls on Third Party Vendors

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Amazon has eased restrictions on third-party retailers on its platform, said a source on Monday. The e-commerce company will no longer prohibit its third-party retailers from listing their products on other sites for less than they do on Amazon’s US site.

The e-commerce giant silently decided to stop telling sellers criticised as anticompetitive to lower their prices on its website as compared to other online retailers. Amazon confirmed the policy change, which took effect Monday, but would not comment, as reported by CNN Business.

The change comes following concern that the stipulation, called price parity, could be in violation of US antitrust law. This concern was addressed by a letter dated December 2018, the from United States Senator Richard Blumenthal was sent to Department of Justice and the Federal Trade Commission calling an investigation into antitrust violations and how they could affect the prices that consumers pay for goods.

“Amazon’s price parity provisions may raise prices for consumers both in the short term and in the long run. Relatedly, Amazon’s price parity provisions may work to block the emergence of more efficient online marketplaces that might offer consumers lower prices on their favourite goods,” he said in the letter

Amazon had enforced its policy in the past by threatening to remove merchants who violated the contract clause. He argued the policy raised antitrust concerns and should be investigated by U.S. regulators, a CNN report said.

In a statement to CNN Business, Blumenthal said he welcomed Amazon’s decision, but that he is deeply troubled that federal regulators responsible for cracking down on anti-competitive practices seem asleep at the wheel, at great cost to American innovation and consumer

Despite being the largest e-commerce marketplace and cloud computing platform in the world as measured by revenue and market capitalization, Amazon still faces scrutiny from legislators who want more regulation of large tech companies

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