Amazon, worried that it could run afoul of antitrust laws, will stop preventing third-party sellers from hawking their products on other websites for a lower price.
According to a report in CNN, Amazon confirmed that the new policy kicked off this week but declined to comment further. CNN reported that Senator Richard Blumenthal had reached out to the Department of Justice and the Federal Trade Commission calling for an investigation into whether or not the eCommerce giant was violating antitrust rules by requiring merchants to match the price on all the websites it sells on. The rule was called price parity by Amazon.
In a letter to the Department of Justice and the Federal Trade Commission which Blumenthal penned in December, he said: “Amazon’s price parity provisions may raise prices for consumers both in the short term and in the long run,” reported CNN. The letter went on to say that “Amazon’s price parity provisions may work to block the emergence of more efficient online marketplaces that might offer consumers lower prices on their favorite goods.” Blumenthal told CNN he was glad Amazon made that decision but remains “deeply troubled” that federal regulators failed to stay on top of anti-competitive practices that hurt American innovation and consumers.
Although Blumenthal welcomed Amazon’s move, the eCommerce company still has to contend with Senator Elizabeth Warren, who is running for president. She has called for technology companies including Amazon to be broken up, arguing they have gotten too big and control too much of what consumers use. Under a law Warren is proposing, Amazon couldn’t sell its own branded products on its platform.
At the same time that lawmakers are shining a spotlight on some of Amazon’s business practices, the company is dealing with its move to pull out of New York as its second headquarters. Amazon had chosen Long Island City, but due to opposition from local politicians, it pulled its plans.