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Amazon: OK, OK. We'll let traders flog tat more cheaply elsewhere

Concession by online bazaar after Office of Fair Trading antitrust investigation

Internet Security Threat Report 2014

Amazon has agreed to stop forcing third-party traders to offer their cheapest prices on its online marketplace within the EU, Blighty's Office of Fair Trading has announced.

The online bazaar had been banning traders from selling their products at a cheaper price elsewhere using threats of Amazon account suspension and payment-blocking for the offenders, but now other websites will be able to undercut the tat behemoth.

The regulator started a formal anti-competition investigation of the practice in October last year, after "numerous complaints" from traders, but has said that it may now close the investigation after the ecommerce site agreed to ditch the policy.

"We welcome Amazon’s decision to end its marketplace price parity policy across the European Union," said Cavendish Elithorn, OFT senior director of its Goods and Consumer division, in a canned statement.

"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."

The office said that it had worked closely with the German Federal Cartel Office, which was running a similar investigation, but added that it had not reached a decision about whether Amazon had infringed on competition law.

Amazon justified its price parity policy on its website by saying that it "worked hard to ensure that customers do not find a better price on any other platform" and for that reason, it was "very strict" about compliance. Any seller who wasn't obeying the rules could have their account blocked or suspended.

"If you do not maintain Price Parity, Amazon can contact you at any time to warn you," the site used to say. "They can also suspend your account and block your payments at any time; and they won’t hesitate in doing so, irrespective of how successful you are on their platform. Please note your account will be noted as well, with a potential impact across other countries if you sell globally."

Amazon's price-parity policy is believed to remain in place in its markets outside the EU, including the US. ®

Internet Security Threat Report 2014

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