Amazon started as online book store and has grown to be the worlds largest online retailer.
Amazon abandon Price Parity Policy
As of today, 30th August 2013, Amazon is to end their Price Parity Policy which restricts its sellers from offering lower prices on other online sales channels, across its Marketplace in the European Union.
What this means for you is that you’ll no longer have to match prices on your website or other marketplaces with the price that you offer on Amazon. What it means for consumers is that when buying from a third party seller on Amazon they can no longer presume that it’s the lowest price that retailer offers without checking around on the net.
In reality competition from retailers and Amazon retail is likely to ensure that prices don’t rise steeply in the run up to Christmas.
The change of heart from Amazon comes after the OFT launched an investigation in October 2012, into suspected anti-competitive arrangements by Amazon relating to online retail. This investigation was being conducted under Chapter I of the Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union.
The OFT has not reached a decision as to whether there has been an infringement of competition law, but Amazon have informed the OFT that they plan to end their Marketplace price parity policy in the European Union. In light of this decision, the OFT is currently minded to close its investigation on grounds of administrative priority.
The OFT said “As Amazon operates one of the UK’s biggest e-commerce sites, the pricing on its website can have a wide impact on online prices offered to consumers elsewhere. We are pleased that sellers are now completely free to set their prices as they wish, as this encourages price competition and ensures consumers can get the best possible deals“.
It’s important to note that no assumption be inferred that there has been an infringement of competition law.
I am certain some 3rd party sellers would have been banned from amazon for breaking this policy. It would be interesting to see if they have any legal grounds for re-in station of accounts or even lost profit based on the fact the contract they entered into with amazon was unfair and maybe unlawful
I think that could be one of the reasons Amazon have pulled the policy now, but there would be no come back for sellers as it is Amazon that have removed the policy themselves and not a rulling from the OFT.
I have always understood the policy, however I have always felt it is an unfair one as in effect it is price fixing.
I think you may find in some categories that prices may rise now rather than later as sellers will think they can cash in for Christmas.
Our prices will stay the same as on our sites, but we are facing more and more sellers now selling similar products from China and Hong Kong on Amazon that has never happend before.
Excellent result for the OFT. Makes a welcome change.
Did anybody really take any notice of that policy, I have been selling on Amazon for years at a slightly higher rate where needed to allow for their higher fees!
We got slapped for it a while back for it but not really, its too much hassle
I never like this policy and thought it may have been some form of price fixing. Also with higher fees on Amazon than ebay it was always annoying trying to compete on different market places.
I always ignored this policy anyway – it was silly
I wonder how many people in the end got caught and kicked out and are now asking to be let back in and at the same time how many people were just ignoring the policy and setting their own price anyway…
Good news all round ! The policy made no sense. Alot of amazon buyers dont buy a particular item based on price. They do it from reviews of that product.
Unlike ebay where they buy any old junk that comes up in a general search.
We just used different barcodes on other sites…..
Brilliant news for us, Amazon have been threatening us with a 2 week suspension if we are further caught selling cheaper elsewhere. We planned to ignore this and see what happens as we cannot afford to price match with our direct pricing, especially if they insist on charging seller fees on the postage.
Great feeling to finally have some good news come from our Amazon channel 🙂
This is thoroughly good news and is to be welcomed.
Well done to both the OFT and the German competition authorities who had started parallel investigations.
And special thanks to all those sellers who were brave enough to formally complain to the OFT!
Great news – we were suspended twice by Amazon last October/November for the price parity rule (even though it was their mistake as you needed to add postage to the website to compare). On the 2nd suspension we were told it was final with no appeal but I sent a very detailed letter anyway and someone from Seller Performance called me – it was then resolved but lost over 2 weeks of sales pre-Xmas.
p.s. has anyone has this news confirmed to them directly by Amazon?
Is this confirmation enough? 🙂
Thanks Chris – a blank PRICE PARITY page is probably as good as we’ll get. They’re not great at communicating with sellers when there is an issue.
Just currently battling with them over a product that had one batch recalled – they decided to remove all listings for that item and now 3 weeks on they still won’t reply to my question as why it has been removed. Have sent numerous messages and the seller support team can’t get seller performance to respond.