Amazon and its merchants face off in court – the right to set prices in question
The District of Columbia (US) Superior Court sued Amazon because its merchants (TPS third-party sellers) cannot sell a product on Amazon for less elsewhere, even on its own websites or on clearance sites. .
It’s a long story, but one that the US, EU and UK are pleading for. Essentially, Amazon’s Business Solutions Agreement (BSA) prohibits TPS from listing the same product elsewhere at a lower price (PPP price parity provision) – even on its website or on a liquidation site. Amazon will quickly remove the listing and, in some cases, may impose TPS penalties.
Europe and the UK have already ruled that the PPP is anti-competitive. Amazon has removed these provisions there. And in 2019, under close scrutiny from the US Congress, Amazon pulled the PPP from its US BSA. However, Amazon quickly replaced PPP with an effectively identical substitute, the Fair Pricing Policy (FPP).
TPS, however, complains that the change from DPI to FPS is smoke and mirrors. Amazon has many ways to reduce search visibility for these products so they can’t win. In some cases, it bans the TPS for no reason – as it can under the BSA.
The US Court has found (but not yet ruled)
- This practice, far from allowing consumers to get the best products at the lowest prices (Amazon’s disguised claim), rather has the effect of artificially inflating prices across the entire online retail market, both for products sold on Amazon’s online retail platform and its competitor’s online retail platforms.
- PPP artificially raises the price of goods across the entire online retail market. Why? Because TPS has no choice but to incorporate Amazon’s fees and high costs into the prices of its products when selling on Amazon and elsewhere.
- That the anti-competitive impact of Amazon’s behavior is compounded by a complex system of fees and surcharges. It charges up to 40% of the total product price due to its market power: over 70% of online sales in the United States are done through its platform.
- That in the face of such unreasonable BSA terms, many TPSs are denied access to much of the US market – it’s Amazon’s way or the highway.
Amazon is only trying to protect its grass – or at least to grow taller grass
By setting these fees and charges, he can artificially set the price of the good above his private label products that he sells in direct competition with the GST.
The full complaint is here (it’s a PDF, so check the downloads)
GadgetGuy’s point of view
The rich are getting richer and we’re all screwed. Last year, our American correspondent did not hesitate to write a series of articles on Amazon and the trust. His conclusion was that the words Amazon and altruistic are not compatible. And no, he swears that there is no “big poppy syndrome” in his treatises.
He revealed how Amazon is using AI to drive sales, including predatory surge pricing if he thinks you can pay more. He showed the huge number of tentacles that Amazon has and how they inspire us to integrate them into our lives. Or how Amazon is not only screwing us up, but also its employees, TPS, government, and delivery systems. And finally, how you can’t trust any reviews on Amazon – finally half of them are fake because the system demands reviews to get better search visibility.
Smoke, Fire, eh?