Amazon ends price restriction for Marketplace sellers in the EU
The online giant has scrapped a controversial price parity policy, amid investigations by UK and German regulators.
Amazon has ditched a controversial rule that prevented Marketplace traders on its website from selling their goods cheaper elsewhere.
The 'price parity policy' will no longer apply to third-party sellers operating in the European Union.
The move from the online retailer comes amid pressure from investigations launched into the policy in the UK and Germany.
Anti-competitive
In the UK the Office of Fair Trading (OFT) opened an investigation into Amazon’s price parity policy in October last year.
The regulator was forced to act after receiving numerous complaints, dating back to early 2010, from sellers concerned that Amazon’s pricing restrictions were anti-competitive.
The investigation was looking at whether Amazon’s price restrictions had the potential to curb the entry of potential new sellers.
It was also concerned as to whether the policy would directly impact the prices sellers were permitted to set on platforms including their own website, resulting in higher prices for shoppers.
During its investigation the OFT collaborated on a parallel probe being conducted by the German Federal Cartel Office.
Escaping a verdict
Amazon’s announcement that it would drop its price parity policy for sellers in the EU has put an end to both probes.
The OFT said it would close its investigation and reported that the German regulator had made a similar announcement.
So Amazon has managed to escape a verdict on whether it was breaking competition law.
Lifting the restrictions
The alterations to Amazon’s terms and conditions for sellers are now in force.
The price restriction clause will be dropped from new contracts, while those already selling will be released from adhering to the rule from now on.
Amazon said it would contact existing third-party traders to let them know of the change.
Freedom to set prices
The OFT welcomed Amazon’s change.
Cavendish Elithorn, OFT Senior Director of Goods and Consumer, 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."
However, Amazon’s sites in the US and elsewhere outside of the EU continue to enforce a price parity policy for third-party traders.
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I used RM for parcels under 2KG and couriers for over that. Since April, RM's small parcels are now tiny and everything else large - and expensive. So, it's now couriers all the way and most eBayers have switched over too. If the new-to-be owners of RM think they will have the parcel traffic RM had pre April 2013, they are in for a nasty shock. The other losers are the post offices which have lost the majority of their parcel trade/income and we can only hope the privately run ones (and most of them are now) don't throw in the towel and leave us without PO's altogether. A sad state of affairs all round for this England of ours.
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Why is post expensive in the UK? Because thePO has to be privatised to fit in with thecapitalist mentality that pervades this country and has done so snce Mrs T started with the gas industry. Remember 'Tell Sid'? . Well tell side he's been stuffed good and proper and will continue to be so for the forseeable future. The POs needs high prices to attract suffiecent capitaists to buy the shares as it needs to pay a large dividend. I avoid the postal service as far as possible by using email and I hope firms on Amazon use couriers as much as possible.
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VAT exclusive pricing is NOT illegal for retailers. Just has to be clearly marked and is an option which has to be everything or nothing. Shops in Europe can also have VAT exclusive pricing as the norm. If you think people are too stupid to add up the overall cost of item plus P&P, then the Ebay sales model and the multi-billion turnover would indicate otherwise. 'Free' shipping is becoming very popular, but is a nightmare for sellers to control costs and buyers are delusional about the real postage costs these days. The UK Post Office is screwing us all more than ever. If my Ebay sales ever grew to a significant level I would relocate to Germany where rates are up to two thirds cheaper than here.
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19 September 2013