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Temu in the Spotlight as Part of Broader Amazon Pricing Probe

By  |  January 28, 2025

Pinduoduo, the Chinese eCommerce giant behind online marketplace Temu, has recently responded to inquiries from the U.S. Federal Trade Commission (FTC) concerning Amazon’s pricing practices. According to The Information, the FTC’s questions to Temu are tied to allegations that Amazon has been penalizing merchants for listing products at lower prices on competing platforms. The scrutiny comes amid a broader antitrust probe into Amazon’s pricing policies, which are believed to contribute to higher consumer prices.

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    Reports indicate that the FTC’s communication with Pinduoduo representatives occurred before January 20, 2025, when FTC leadership transitioned from Lina Khan to incoming appointee Andrew Ferguson. The inquiry reflects growing concerns among U.S. regulators regarding the influence of international eCommerce platforms on the domestic market, particularly as companies like Temu offer goods at steep discounts, often directly sourced from China.

    Read more: Temu Faces EU Scrutiny Under DSA for Potential Violations in Curbing Illegal Sales

    Per The Information, the FTC’s engagement with Temu involved both formal letters and phone calls. These discussions highlight the increasing regulatory focus on how foreign eCommerce players interact with U.S. retailers, particularly in the context of Amazon’s competitive pricing strategies. The investigation comes as part of an ongoing antitrust lawsuit against Amazon, which is set to go to trial in 2024. The lawsuit alleges that Amazon’s pricing policies, which penalize merchants who offer lower prices elsewhere, are driving up costs for consumers.

    Amazon has consistently defended its policies, with a spokesperson asserting that merchants are responsible for setting their own prices and that the platform encourages sellers to list their products on multiple sites. However, the FTC’s focus on Temu indicates that regulators are exploring whether these practices extend beyond Amazon’s platform and impact other players in the market, including those based overseas.

    The heightened attention from U.S. regulators has had a noticeable impact on Pinduoduo’s stock, with investors expressing concerns about the potential consequences of this scrutiny.

    Source: The Information