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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