Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Feb 20 2013 23:41:22

Is Amazon's Price Parity Clause Anti Competitive?

By: Ina Steiner

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Many an online seller has lamented over Amazon.com's price parity clause which prohibits them from offering items they list on Amazon at a lower price anyplace else. Now the German government is investigating that policy to see if it is anti-competitive.

Amazon.com's Fees and Pricing page says sellers may list items at any price they feel is fair, regardless of the Amazon.com price or list price, within the limits set by Amazon, so long as the price adheres to its General Pricing rule, which states:

By our General Pricing rule, you must always ensure that the item price and total price of an item you list on Amazon.com are at or below the item price and total price at which you offer and/or sell the item via any other online sales channel.


GigaOm wrote about the German Bundeskartellamt's investigation, which had been picked up by German news outlets. Bundeskartellamt is an independent competition authority whose job is to protect competition in Germany - which sounds similar to the role of FTC in the U.S.

According to the Bundeskartellamt press release, issued today, it launched a web survey of 2,400 sellers who offer their products through Amazon Marketplace to examine the effects of the price parity clause used by Amazon.de for its Marketplace sellers. "The price parity clause prohibits them from selling products they offer on Amazon Marketplace cheaper on any other internet sales channel," it states. "The prohibition applies to other internet platforms, such as e.g. Ebay or Rakuten, as well as online shops owned by the sellers."

The press release also states, "In order to become active on an internet marketplace, sellers must pay the operators of the marketplace (Amazon, Ebay, Rakuten) various fees, e.g. a specific percentage of the sales prices they achieve. As the sellers cannot allow any favourable conditions to translate into a more favourable price payable by end consumers, it can be difficult for other internet marketplaces that compete with Amazon, especially new platforms entering the market, to reach a large number of customers. There is the threat of Amazon enforcing high seller fees which could result in a generally higher price level without producing sufficient benefits, to the detriment of consumers."

The Bundeskartellamt said Amazon could be required to delete the price parity clause from its terms and conditions if its investigations confirm the suspicion. Amazon would not comment on this development.

What do you think of Amazon's rule that you can't offer an item for a lower price than what you sell it for on Amazon? And does this policy suppress competition, or does Amazon have the right to set the rules on its marketplace?




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This user has validated their user name. by: Ming the Merciless

Thu Feb 21 01:03:51 2013

If memory serves, ebafia has the same policy copycatted from Amazero.

Three cheers for the German government. If we had a government concerned about corporate crime, they'd be doing the same thing.

Them number of laws that corporate criminals break every day is mindboggling.

The Department of Justice could easily start with the Sherman anti trust Act and, among others, laws that prohibit price fixing.

Someone needs to figuratively whack  these guys in their collective kneecaps among other places.

The corporate criminals of America will continue their white collar crime wave until the executive branch of the government stops them.

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by: NullApps This user has validated their user name.
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Thu Feb 21 03:06:25 2013

@ Ming

eBay doesn't have this policy for normal sellers.  I've heard from more than one Diamond Powerseller that they were held to price parity but that is up to the individual seller.

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by: kilogirl78 This user has validated their user name.

Thu Feb 21 03:11:09 2013

Yes I believe it is anti-competitive.  I wish the US government would take this issue on.  

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by: Massachusets Howler This user has validated their user name.

Thu Feb 21 04:36:32 2013

What- is Amazon policing other sites!??
OF COURSE this is ILLEGAL and anti-competitive.
JEEZE!
MH

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This user has validated their user name. by: Philip Cohen
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Thu Feb 21 05:42:11 2013

I don't have a problem with this Amazon requirement, and I don’t see it as being anti-competitive: there is no “price maintenance”; you are entitled to price your items at whatever price you like; but, if you are then going to undercut your own listings on Amazon, what are you doing listing on Amazon.

Amazon provides a very popular platform from which they also want to profit; if you are using Amazon simply to advertise your goods, which you will then sell cheaper elsewhere, then Amazon is entitled to replace you with someone who wants to sell on Amazon.

Now, in the case of eBay, that is another matter; eBay shows small sellers no respect at all and therefore those small sellers are entitled to return eBay the favour …

eBay / PayPal / Donahoe: Dead Men Walking

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by: Patricia This user has validated their user name.

Thu Feb 21 12:08:39 2013

Sad...from platforms where you could show your wares (for which you paid a small listing fee) these monsters have turned into bullies who treat sellers with an iron fist "my way or the highway".   I'm happy to be only an occasional seller now.

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by: Moonwishes This user has validated their user name.
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Fri Feb 22 01:16:00 2013

I list my items on Amazon at the same price as I would elsewhere. But for Amazon to prove that people were non-compliant with the 'total price' they would then have to calculate the shipping costs on both sites and the fees on both sites, to see if the two items came out with identical prices once all deductions were made. On ecrater since they don't grab over $1 of my S&H fees, so I can keep my S&H lower than Amazon. With the fees that Amazon sucks out of the purchase price, they would have to account for that if they did go looking for law violators. Do I like all these rules and regulations? Not especially, but I didn't like punching a time clock to make money either--especially at those places that didn't allow 'overtime' so you had to literally punch out or lie on your time sheet to prove that you left when you were supposed to whether an emergency arose that keep you on site for longer (I was an RN, not my fault that someone died two minutes before the end of my shift so I got stuck with paperwork). Every place that you make money is going to have some not so nice things attached. I can handle the rules I 'work' under now and if I didn't like them, I would go elsewhere or start my own website.

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by: Bigdog This user has validated their user name.
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Fri Feb 22 01:41:52 2013

Talk about double talk.

I got a message on a site that I sell on that some of my products violated the manufactures new MAP pricing.

I did a Bing search and found out the lowest price was on Amazon, sold by Amazon and shipped by Amazon. Its was listed lower than mine and way below the MAP.

Before they enforce rules they should learn to follow them.

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by: Watching the Wheels This user has validated their user name.

Fri Feb 22 04:35:49 2013

This whole Competition is good has been a contributing factor to the economic mess that many are dealing with.

I see nothing wrong with requiring this policy. I also don't understand why sellers would want to undercut their own pricing.

Selling an item on sites with lower fees means the potential is there for a better profit margin, why would someone want to sabetage THAT?

It would be nice to see ALL businesses set reasonable and fair pricing, as opposed to the gimmick driven stunts going on today.

The "I can top this attitude" of continuously trying to outdo the other guy's "deal" is one of the reasons why so many items NEED to be produced elsewhere.

There are only so many pennies to a dollar.

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by: JoyfulA This user has validated their user name.

Fri Feb 22 09:36:44 2013

What Moonwishes said.

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by: Frump This user has validated their user name.

Fri Feb 22 13:20:32 2013

@BigDog

MAP pricing is a completely different issue here. Amazon has always been anti-MAP pricing and they will ignore that rule from the distributors. The issue at hand here is that the price a 3PM sells for on Amazon has to be lower than or equal to the price that the merchant sells it for on other venues. I don't like that policy at all and I hope it starts a chain-reaction in the West to have other countries, starting with the USA, declaring the practice anti-competitive.

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by: comet This user has validated their user name.

Fri Feb 22 14:50:24 2013

Greed Is Good

Gordon Gecko

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by: d84rrv This user has validated their user name.
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Sat Feb 23 10:36:16 2013

What is so fantastic about this story is amazon sells it's own sites at a selection of different prices.  

If you look at an amazon price tracking site you can see there how much variation they have in there prices!

Example, http://www.huge-river.com/product/B003N18OA6  



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