Amazon to drop Marketplace price parity

Amazon to drop Marketplace price parity

Amazon is to drop a clause banning third party Marketplace traders across the EU from offering products elsewhere more cheaply as of tomorrow (30th August).

The move follows trading standards investigations in the UK and Germany triggered by numerous complaints from traders that the rule was unfair. The Office of Fair Trading said it began investigations last October, fearing the rule was anti-competitive.

Amazon had demanded that third party traders who use its Marketplace platform did not offer their goods anywhere else more cheaply. After a parallel investigation into the same issue by the Federal Cartel Office in Germany, Amazon has decided to alter the policy.

From tomorrow (30th August) the price parity clause will be dropped across the EU. As a result, the inquiries in the UK into whether the policy was anti-competitive are expected to be closed.

Cavendish Elithorn, OFT senior director of goods and consumer, said: "We welcome Amazon’s decision to end its Marketplace price parity policy across the European Union. 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.”

Elithorn warned other businesses with similar policies to re-think their rules. He added: “The OFT recommends that other companies operating similar policies review them carefully.  Businesses concerned that they are being prevented from setting their own prices should not hesitate to contact the OFT.”

Third party marketplaces have become a popular way to grow business in books. Last October, book wholesaler Bertrams launched Wordery, which would trade on marketplace websites before launching  as an independent website. Wordery Co-founder Will Jones told The Bookseller: "Wordery now have freedom to price our books as we wish. This is great news for Wordery and really boosts our plans to be a leading multichannel bookseller, through all our marketplaces and This ultimately gives keener prices and greater access and choice for all book buyers." Wordery made £3m in revenue in its first six months of trading.  

In January, closed its direct-to-consumer trading website to concentrate on its third party marketplace platform, after its Japanese owner Rakuten announced it intention to concentrate on that side of the business. 

It is believed Amazon’s price parity rule still exists for marketplace traders in America.