Regulators are looking hard at all of the major tech companies with an eye toward anti-trust violations. At Bloomberg, Spencer Soper reports that one particular Amazon practice may fall into that category. He writes:
Amazon.com Inc.’s determination to offer shoppers the best deals is prompting merchants selling products on its marketplace to raise their prices on competing websites, a testament to the company’s growing influence over the e-commerce market.
Amazon constantly scans rivals’ prices to see if they’re lower. When it discovers a product is cheaper on, say, Walmart.com, Amazon alerts the company selling the item and then makes the product harder to find and buy on its own marketplace — effectively penalizing the merchant. In many cases, the merchant opts to raise the price on the rival site rather than risk losing sales on Amazon.
Pricing alerts reviewed by Bloomberg show Amazon doesn’t explicitly tell sellers to raise prices on other sites, and the goal may be to push them to lower their prices on Amazon. But in interviews, merchants say they’re so hemmed in by rising costs levied by Amazon and reliant on sales on its marketplace, that they’re more likely to raise their prices elsewhere.
Antitrust experts say the Amazon policy is likely to attract scrutiny from Congress and the Federal Trade Commission, which recently took over jurisdiction of the Seattle-based company. So far, criticism of Amazon’s market power has centered on whether it mines merchants’ sales data to launch competing products and then uses its dominance to make the original product harder to find on its marketplace. Harming consumers by prompting merchants to raise prices on other sites more neatly fits the traditional definition of antitrust behavior in the U.S.
“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.”
In an emailed statement, an Amazon spokesperson said: “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.” Walmart declined to comment.
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