The Competition Bureau of Canada has announced further progress in its probe into Amazon to determine if the e-commerce giant’s regulations for vendors on the platform constitute an abuse of dominance under the federal Competition Act. The investigation focuses on the Amazon Marketplace Fair Pricing Policy, which gives the company the authority to penalize sellers for certain actions, such as listing an item for sale at a significantly higher price than its recent offer on Amazon or elsewhere.
Third-party sellers are required to adhere to the fair pricing policy, established in 2017, to sell their products on Amazon. The bureau has secured a court order mandating Amazon to provide records and pertinent information for the investigation, emphasizing that there is no current finding of misconduct.
The investigation aims to ascertain whether the policy compels sellers to charge customers more than they would otherwise, restricts competition by deterring sellers from setting lower prices on platforms other than Amazon, or diminishes price competition in the marketplace. Amazon states that prices deemed detrimental to customer trust may be delisted as a featured offer, have shipping options suspended, or result in the suspension or termination of selling privileges under the fair pricing policy.
Businesses argue that the policy pressures them to sell products at unsustainable low rates. Bret Nederlof, the founder of Brindle Pet Supplies in Red Deer, Alberta, voices concerns that Amazon internally sets prices for products, making it challenging for sellers to list items at higher prices. Nederlof highlights instances where Amazon’s pricing undercuts production costs, leading him to opt out of listing products on the platform if faced with pricing disparities.
Amazon has expressed intent to collaborate with the Competition Bureau to demonstrate that its policies benefit consumers by facilitating informed purchase decisions and supporting Canadian businesses. While the bureau’s announcement signifies progress, legal experts caution that any potential changes hinge on Amazon voluntarily altering its practices post-investigation findings.
The probe signifies a broader trend of intensified scrutiny towards tech conglomerates by regulatory bodies. The investigation echoes the Competition Bureau’s ongoing legal dispute with Google over alleged anti-competitive practices in online advertising. Stakeholders hope the investigation prompts Amazon to reassess its fair pricing policy to address concerns raised by businesses and industry analysts.
The Canadian Federation of Independent Business echoes the sentiment, emphasizing the challenges faced by small enterprises compelled to navigate Amazon’s marketplace dominance. The CFIB’s report underscores the dissatisfaction among small and medium-sized businesses with their interaction on Amazon’s platform. Stakeholders anticipate increased transparency from Amazon regarding its policies and pricing mechanisms following regulatory intervention.
The announcement coincides with Amazon Prime Day, an annual event offering substantial discounts for Prime members. The investigation remains ongoing, with no concrete findings of wrongdoing at this juncture.
