Inside the White House with D.C.'s most wired reporter. Sign up for Mike Allen's Axios AM.

Stories

Amazon to end price practice critics said could violate antitrust law

A bald man sits in front of a sign that says "WIRED"
Amazon CEO Jeff Bezos. Photo: Matt Winkelmeyer/Getty Images for WIRED25

Amazon will no longer tell third-party merchants that sell products on its platform in the United States that they cannot offer the same goods for a lower price on another website, according to a person with direct knowledge of the company's decision.

Why it matters: Critics have said the so-called "most favored nation," or "price parity," provisions could violate antitrust law. But even without them, the company still faces a broader set of attacks on its size and power in the United States and around the world.

Flashback: Sen. Richard Blumenthal (D-Conn.) in December asked the Department of Justice and the Federal Trade Commission to investigate the requirements for possible antitrust violations late last year.

  • Blumenthal said he was concerned that they could "stifle market competition and artificially inflate prices on consumer goods."
  • His request followed a May law review article that found that the most favored nation requirements "employed by online platforms can harm competition by keeping prices high and discouraging entry" in many cases.
  • Amazon dropped the requirement for merchants on its platform in Europe under regulatory pressure in 2013.

What they're saying: "Amazon’s wise and welcome decision comes only after aggressive advocacy and attention that compelled Amazon to abandon its abusive contract clause," Blumenthal said, while issuing a wider call for antitrust investigations into large tech companies.

  • Amazon declined to comment on the change.

The big picture: Amazon has become a symbol for progressives of the ill effects of corporate power in an age of increasing consolidation. Last week, 2020 presidential candidate Sen. Elizabeth Warren (D-Mass.) said Congress should pass a law banning large companies from operating and owning participants on the same online platform.

  • That proposal would make it impossible for Amazon to sell its house brand products, like the popular AmazonBasics batteries, that critics say hurt other brands that sell on its platform.
More stories loading.