Examining Amazon's Exclusionary Anti-Discounting Conduct and Its Impact on Price Competitionby@linakhantakesamazon
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Examining Amazon's Exclusionary Anti-Discounting Conduct and Its Impact on Price Competition

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Amazon's monopoly control extends to the suppression of price competition, ultimately resulting in higher prices for consumers. Through its price-surveillance team, contractual obligations, and penalties, Amazon punishes sellers offering lower prices elsewhere and discourages rivals from undercutting Amazon's prices. This stifling of price competition leaves competitors unable to gain scale and shoppers conditioned not to seek lower prices off Amazon. As a result, Amazon's monopolistic practices keep prices elevated in relevant markets.
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FTC v. Amazon Court Filing, retrieved on Sep 26, 2023, is part of HackerNoon’s Legal PDF Series. You can jump to any part in this filing here. This is part 34 of 80.

A. Amazon Maintains Its Monopolies In Both Relevant Markets Through Exclusionary Anti-Discounting Conduct That Stifles Price Competition

262. A core Amazon strategy is to limit one of the most fundamental avenues of competition: price competition. Amazon understands the importance of maintaining the perception among shoppers that it has the lowest prices. But in reality, Amazon relentlessly stifles actual price competition by punishing sellers who offer lower prices anywhere other than Amazon and disciplining rivals that undercut Amazon’s prices.

263. Amazon uses a variety of tactics to execute its anti-discounting strategy. At the foundation is Amazon’s sprawling price-surveillance group, the (redacted) which constantly crawls the internet for prices. Using this price-surveillance team, Amazon punishes third-party Marketplace sellers who offer lower prices on other online stores. Amazon imposes additional contractual obligations suppressing price competition on its most important sellers, backed up by the threat of even stronger penalties—including total banishment from Amazon’s Marketplace. Amazon also deters rivals from even attempting to compete with Amazon’s first-party Retail business on price by ensuring that rivals’ price cuts do not result in greater scale, only lower margins.

264. Combined, Amazon’s conduct quashes one of the most direct ways to compete with Amazon in both relevant markets: by offering lower prices. In an open, competitive environment, rival online superstores could attract more business by offering shoppers lower prices, and rival online marketplaces could attract sellers by charging them lower fees, allowing sellers to pass those savings on to shoppers via lower prices. Amazon suppresses this price competition by wielding its monopoly power to prevent sellers and retailers from offering lower prices off Amazon.

265. Without the ability to attract shoppers or sellers through lower prices, rivals are unable to gain a critical mass of either shoppers or sellers despite needing both to compete against Amazon. Further, by punishing sellers when there are lower prices off Amazon and disciplining rivals that try to compete on price, Amazon teaches shoppers not to look for lower prices off Amazon. Less comparison shopping again hinders rivals from gaining a larger consumer base. Amazon’s anti-discounting strategy therefore denies rivals the ability to gain scale, cements Amazon’s dominance in both relevant markets, and ultimately keeps prices higher than they would be in a competitive market.

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This court case 2:23-cv-01495 retrieved on October 2, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.