Amazon confirmed this week that it has ended its restrictive third-party price parity policy in the US. Amazon will no longer prohibit merchants from selling the same products on other sites at prices lower than Amazon’s list price. The policy is under scrutiny for potential violation of US antitrust law.
In 2013, Amazon ended a similar price parity policy in the European Union after investigations by the United Kingdom’s Office of Fair Trading and Germany’s Federal Cartel Office.
The change could potentially have large effect on e-commerce and e-tailers everywhere, allowing sellers to do a more robust business on other platforms without having to match Amazon prices. A more case-by-case pricing model could also lead sellers to rely less heavily on Amazon sales, and increase competition.
Recent calls by US politicians to hold Amazon accountable and investigate various actions and policies may have spurred the change. Three months ago, Sen Richard Blumenthal called on the Department of Justice and Federal Trade Commission to open Amazon antitrust investigations. Price parity restrictions may have allowed Amazon to undercut the competition with its vast size and influence, ultimately influencing how much customers pay for goods everywhere. In a statement, Blumenthal said it was “aggressive advocacy and attention that compelled Amazon to abandon its abusive contract clause.”
In further scrutiny, last week Democratic Presidential candidate Elizabeth Warren singled out breaking up Amazon (as well as Facebook and Google) as a central piece of her campaign platform.