In response to probes from the Office of Fair Trading in the UK and the Federal Cartel Office in Germany Amazon has dropped its price parity policy in Europe which stipulated that Amazon Marketplace vendors couldn’t offer the same goods on different websites at lower prices.
That’s great to see. To my mind Amazon was using its scale to bully smaller retailers to protect it’s revenues and margin. Amazon does a job as a middleman and deserves to get paid for that, but their rake should be subject to competition. Simple as that. I just checked in on their pricing page, and they take 10-15% for most product categories, but the highest is 40%, which is surely too high. Going forward it will be worth checking for better prices elsewhere, particularly if you are buying Kindle accessories, jewellery or watches.
Overall I’m a big fan of Amazon, and the Marketplace offers great distribution to its vendors, but there are elements of the company that need to be held in check. It’s great to see our competition policy being effective in this instance and that our institutions are working. I think that’s largely down to the increased powers they’ve been getting in recent years, including the power to fine companies up to 30% of global turnover.
Amazon’s pricing parity policy still stands in the US. It will be interesting to see how long that lasts.