Amazon.com Inc. has removed a clause in its contracts that had required third-party marketplace sellers to set their prices on Amazon at the same price, or lower, than their prices elsewhere online.
Amazon has long leveraged that clause, which is known as a price parity agreement, to ensure that consumers wouldn’t be able to find lower prices for marketplace sellers’ items on the sellers’ websites or other marketplaces such as Walmart, Jet or eBay.
Amazon quietly made the change amid an environment that’s increasingly hostile to the outsized influence of large technology companies. For example, Sen. Richard Blumenthal (D-CT) in December sent letters to the Justice Department and the Federal Trade Commission demanding investigations into Amazon’s contracts with marketplace sellers. The letters referenced British and German investigations conducted a few years ago into its use of pricing parity agreement (those investigations led the retailer to drop the clause in Europe).
The move was quickly praised by Blumenthal on Twitter.
.@amazon made a wise & welcome decision to remove abusive anti-competitive clauses from its contracts with sellers. This decision comes only after aggressive advocacy & attention that compelled them to take this action. https://t.co/odZfbzKaxwadvertisement
— Richard Blumenthal (@SenBlumenthal) March 12, 2019
Amazon is also facing scrutiny from presidential candidate Sen. Elizabeth Warren (D-MA) who last week gave a sweeping antitrust speech that called for breaking up technology giants such as Amazon, Facebook and Google. Warren’s regulatory plan would force the rollback of Amazon’s acquisition of Whole Foods, as well as force Amazon to split up Amazon Marketplace and its private-label businesses.
Amazon, No. 1 in the Internet Retailer 2018 Top 1000, declined to comment on the change.