As Bloomberg has reported, Amazon scans rivals’ prices to see if they’re lower, and if it finds a cheaper product on a site such as Walmart.com, the eCommerce giant sends an alert to the seller and then makes the product harder to find on its own marketplace — unless the merchant raises the price on the other site.
Amazon began sending the price alerts in 2017, and antitrust experts say the policy will likely now be looked at by Congress and the Federal Trade Commission, which recently took over jurisdiction of the company.
“Monopolization charges are always about business conduct that causes harm in a market,” said Jennifer Rie, an analyst at Bloomberg Intelligence who specializes in antitrust litigation. “It could end up being considered illegal conduct because people who prefer to shop on Walmart end up having to pay a higher price.”
An Amazon spokesperson defended the company, saying that “sellers have full control of their own prices both on and off Amazon, and we help them maximize their sales in our store by providing them insights on how to be the featured offer.”
But its merchants disagree. In addition to paying higher fees, many sellers must also buy advertising to stand out on the crowded platform, with some reportedly paying Amazon 40 percent or more of each transaction. So, it’s no surprise that many want to boost their sales on Walmart, which charges less to sell products on its marketplace.
Michael Kades, a former FTC attorney who now researches antitrust issues at the Washington Center for Equitable Growth, said Amazon’s price alerts are sure to be scrutinized by the government.
“If regulators can prove that this conduct is causing merchants to raise prices on other platforms,” he said, “Amazon loses the argument that their policies are all about giving everyone lower prices.”