Report from the Retail Gazette
In Brief – A UK consumer association is preparing a class action antitrust lawsuit against Amazon, alleging that its Fair Pricing Policy has harmed millions of shoppers by pushing third-party sellers using its dominant marketplace to raise the prices they set on other online marketplaces. The Association of Consumer Support Organisations (ACSO) claims Amazon actively monitored the prices that independent traders set on goods they posted on Amazon and also elsewhere on the internet, which often included platforms that imposed lower fees than were charged by Amazon, and penalized their search ranking on Amazon if the product on the competing low-fee platform was set below the price on Amazon, leading many to raise their off-Amazon price to match their on-Amazon price. The ASCO argues that shoppers therefore often paid more than they should have when they shopped on non-Amazon platforms. The case has been filed with the UK’s specialist antitrust court, which must first approve the class. If approved, it could cover around 45 million consumers.
Context – Price parity (or “MFN”) clauses of dominant digital platforms have been a regulatory concern for years, especially when they may impact how online sellers use lower-fee competitors. Amazon has a long and aggressive price parity track record. So does hotel booking platform Booking, which recently agreed to drop the practice in Europe as part of their Digital Markets Act (DMA) compliance plan. Third-party sellers account for 60% of the sales on Amazon, paying fees that often exceed 50% of their sales price. Now defunct low-fee marketplace Zulily is suing Amazon based on a similar complaint about Amazon’s pricing policies, and Federal Judge John Chun rejected Amazon’s motion to dismiss. Chun is also handling a similar antitrust complaint from consumers, and Amazon’s pricing practices are part of the FTC antitrust lawsuit also in front of Chun. Both are proceeding to trial. In Europe, the German competition authority is investigating Amazon’s pricing policies, and the European Commission is expected to investigate the practice in the context of Amazon’s DMA compliance.