When Prices Drop Elsewhere, Amazon Cracks the Whip on Third-Party Sellers

2. Amazon maintains its monopolies by punishing third-party sellers when Amazon detects lower prices on other online stores

269. Using its vast surveillance network, Amazon systematically punishes sellers when Amazon detects a lower price on other online stores. Amazon does this in two ways. One way Amazon punishes sellers is by disqualifying a seller’s offer from appearing in the Buy Box when Amazon finds a lower price on another online store for an item being sold by a seller on Amazon. For many sellers, losing the Buy Box—and even the ability to qualify for the Buy Box—is an existential threat to their business. Amazon has amassed and maintains a huge shopper base, making Amazon a vital sales channel for many sellers. The second way Amazon punishes sellers is by imposing contractual obligations on certain important sellers, backed up with the threat of even stronger penalties, including total banishment from Amazon’s Marketplace.

270. As a result of Amazon’s threats and punishments, even rival platforms that charge sellers less than Amazon for marketplace services would not be able to draw shoppers through lower prices.

271. Amazon not only suppresses the ability of sellers and retailers to offer lower prices elsewhere, but its conduct effectively elevates prices even off Amazon. Because Amazon has steadily hiked the fees it charges sellers while also prohibiting them from discounting on other websites, sellers must often use their inflated Amazon prices as an artificial price floor everywhere. As a result, Amazon’s conduct causes online shoppers to face artificially higher prices even when shopping somewhere other than Amazon.