Report from Bloomberg
In Brief – Canada’s Competition Bureau has secured a court order to advance its investigation into whether Amazon is abusing its dominant position as an online marketplace provider to push third-party sellers to increase prices on other online platforms. The order requires Amazon to produce records relevant to the company’s Marketplace Fair Pricing Policy, which penalizes a seller’s product on Amazon if the product is offered for sale elsewhere online for a lower price. Critics argue that Amazon’s dominance as the largest online marketplace drives third-party sellers to raise their prices off Amazon to match their price on Amazon, even if Amazon’s marketplace and logistics fees are higher than on the competitor site and therefore would permit the seller to set a lower price. The regulator says it is investigating whether the policy is therefore driving up the prices consumers pay on sites that compete with Amazon, as well as reducing competition between other online marketplace sites and Amazon.
Context – Canada’s investigation of Amazon’s policies related to the prices third-party sellers set on other internet commerce platforms parallels a similar investigation by the German competition authority as well as several antitrust lawsuits in US courts. Amazon argues that they are simply pressing third party sellers to lower their prices on Amazon, but many critics argue that Amazon is instead protecting its seller fees, which often reach 50% of the price of a product, from competition by lower-fee platforms where sellers could profitably sell products at lower prices. If a seller sets a lower price on a low fee platform, they lose their sales on Amazon. Instead, many sellers allegedly raise prices elsewhere to meet Amazon’s demands. The company faces multiple antitrust lawsuits in the US targeting their practice and have failed to dismiss consumer class actions, a challenge from marketplace competitor Zulily, and the US FTC’s major antitrust complaint. A similar lawsuit filed by California’s Attorney General is proceeding in California state court and it is reported that Amazon will face heightened scrutiny in 2025 under the EU’s Digital Markets Act.