Newly Unsealed Records Reveal Amazon's Price-Fixing Tactics (theguardian.com) 22
Newly unsealed records in California's antitrust case against Amazon allegedly show the company pressured third-party sellers to raise prices on rival sites like Walmart, Target, and Wayfair so Amazon could maintain the appearance of offering the lowest price. California says Amazon used tools like Buy Box suppression to punish cheaper listings elsewhere. The Guardian reports: [...] In one previously redacted deposition, marked "highly confidential," Mayer Handler, owner of a clothing company called Leveret, testified that he received an email in October 2022 from Amazon notifying him that one of his products was "no longer eligible to be a featured offer" through Amazon's Buy Box. The tech giant, he testified, had suppressed the item, a tiger-themed, toddler's pajama set, because his company was selling it for $19.99 on Amazon, a single cent higher than what his company was offering it for on Walmart. Afterwards, Handler testified, his company "changed pricing on Walmart to match or exceed Amazon's price" or changed the item's product code to try to throw off Amazon's price tracking system. In response to a question from the Guardian, Handler criticized Amazon for tracking prices across the internet and "shadow" blocking his company's products -- tactics which he said were depriving consumers of "lower prices." "Maybe that's capitalism," he wrote. "Or that's a monopoly causing price hikes on the consumer."
In another unsealed deposition, Terry Esbenshade, a Pennsylvania garden store supplier, testified in October 2024 that whenever his products lost Amazon's Buy Box because of lower prices elsewhere on the internet, his sales on Amazon would plummet by about 80%. This financial reality forced him to try to raise his products' prices with other retailers elsewhere, he said. In one instance, Esbenshade testified, he discovered that one of his company's better-selling patio tables had "become suppressed" on Amazon. Esbenshade wasn't sure why, he recalled, until someone at Amazon suggested he look at Wayfair, another online retailer that happened to be selling his patio table below Amazon's price. The businessman went online and set up a new minimum advertised price for the table on Wayfair to ensure it was higher than Amazon's. "So that raised the price up, and, voila, my product came back" on Amazon, he said, thanks to the reinstatement of the Buy Box.
In another unsealed deposition, Terry Esbenshade, a Pennsylvania garden store supplier, testified in October 2024 that whenever his products lost Amazon's Buy Box because of lower prices elsewhere on the internet, his sales on Amazon would plummet by about 80%. This financial reality forced him to try to raise his products' prices with other retailers elsewhere, he said. In one instance, Esbenshade testified, he discovered that one of his company's better-selling patio tables had "become suppressed" on Amazon. Esbenshade wasn't sure why, he recalled, until someone at Amazon suggested he look at Wayfair, another online retailer that happened to be selling his patio table below Amazon's price. The businessman went online and set up a new minimum advertised price for the table on Wayfair to ensure it was higher than Amazon's. "So that raised the price up, and, voila, my product came back" on Amazon, he said, thanks to the reinstatement of the Buy Box.
Well that's odd (Score:3)
Re:Well that's odd (Score:5, Informative)
Often, but not always.
More than once I've bought from an eBay seller after finding similar items cheaper on Amazon, because they claimed their product "original" or "genuine" or something, where the Amazon one is an obvious Chinese knockoff.
Then the package arrives. Dropshipped from Amazon, the same item I passed up before. So I open an eBay return and send it back at the seller's expense, then buy the knockoff from Amazon.
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It's not always cheaper but it should be very similar. If you don't buy frequently from Amazon, you can view eBay as cheaper since the seller normally dropships to you through Prime. It's a way to get faster shipping without subscribing. The prices can be similar because the seller might be buying from Amazon using their rewards card which negates some of the eBay fees.
If you don't care about shipping times, just buy your random crap directly from AliExpress.
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I stopped buying from Amazon a year ago and switched to eBay.
Just about everything is cheaper on eBay... sometimes a lot cheaper... and most of the time have free shipping and returns.
I've also found that eBay sellers are very eager to ensure you are satisfied with the purchase. Good support. They are mostly small businesses.
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I've found the opposite...nearly everything on eBay is more expensive, and it's obvious that they're acting as a middleman between you and Amazon.
They buy something on Amazon for $50 and put it up on eBay for $60 or $70. When you 'buy' it, they buy it from Amazon and ship it to you, pocketing the increased price AND the shipping (which they don't pay for but still charge you for).
I can't recall the last time I saw anything worthwhile on eBay that was actually less expensive than on Amazon.
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Pricing Health (Score:5, Informative)
Of course they're manipulating pricing, they have an entire "Pricing Health" algorithm to control this and it naturally operates in their favor. That's what half their platform is about. Try reading through this if you want a headache:
https://sellercentral.amazon.c... [amazon.com]
Re:Pricing Health (Score:5, Insightful)
Wow - that page reads like a step-by-step guide on how to violate the Robinson-Patman Act. Too bad we haven't had any real consumer protection enforcement in the US since the 1970s.
Re:Pricing Health (Score:5, Insightful)
I think the distinction is that in this case Amazon isn't the retailer, they're acting as a platform for other retailers to compete against each other. So Amazon will argue that this "pricing health" algorithm is just a tool for sellers to ensure they have the most competitive pricing. If another retailer has a lower price then this is considered a "pricing mistake." They've offloaded the responsibility of price fixing to the individual sellers, which is pretty clever.
Re:Pricing Health (Score:4, Informative)
This does more than fix prices, it also drives them up. Amazon charges a lot to sell on its site. You can often afford to sell cheaper on other sites without cutting into your margins at all, just because they have reasonable fees. So this arrangement forces prices to go up to Amazon's level across the internet, costing consumers more for everything.
So, even if you don't use Amazon, you are being burned by this.
Oh, have some pity! (Score:5, Funny)
Most-favored-nation clause (Score:5, Informative)
This was not a secret.
When my business was selling on Amazon, it was spelled out in the agreement: We were required to sell on Amazon at our lowest online price. We could match that price on other channels, but not go lower. This included sales thru our own site.
Enforcement varied. If they found out, you were in trouble. A violation would result in a "strike" (warning) against your account. Multiple strikes would result in suspension from selling on Amazon for 30 days. Additional strikes could result in termination of your seller account.
I'm willing to pay a little more at Amazon (Score:2)
I like the poetic justice involved in me ordering plans for a guillotine from that thumbhead pr^ck Bezos.
Amazon (Score:4, Informative)
Anecdotally, I have a friend who used to sell products through amazon, they got tired of the constant price increases and weird rules for everything, and changed to a different method of selling.
Amazon is just awful. And it's been easy to see it going that way for years.
Collusion and Miles (Score:5, Informative)
1. Collusion (N.) is a secret, deceptive agreement between competitors to limit competition, fix prices, or divide markets, often violating antitrust laws. It creates economic harm by boosting prices and reducing consumer choice. Consequences include heavy fines and lawsuits, while detection relies on finding evidence of agreements
So why do we allow it and continue to ignore antitrust law. (It's sitting in a dark corner gagged and bound)
2. 2. Legal Case: Dr. Miles Medical Co. v. John D. Park & Sons Co.
This is a landmark 1911 Supreme Court case related to, but not setting, "mileage" prices.
The Case: Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911).
Rulings: The 1911 ruling held that it was per se illegal under the Sherman Act for manufacturers to set minimum resale prices for their products.
Overruled: In 2007, the Supreme Court overruled this decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., deciding that minimum resale price agreements should be evaluated under the "rule of reason" rather than being automatically illegal.
The result of this ruling is that you rarely see anyone offering a price lower than what anyone else is offering. How is this a competitive market again?
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Old news (Score:3)
Amazon's pricing has been typically higher for years now. I noticed this when I stopped using them back around 10 years ago. Besides, Amazon has become nothing but a front for Chinesium crap any way. Amazon used to be awesome, but somewhere around 2015/2016 things went downhill quickly.
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I noticed a lot of problems starting about 5 years ago too with getting returns and previously opened packages and outright knockoffs represented as genuine shipped in. Expired items too, all sorts of supply problems. And then there's the way Amazon music starts up and I have to scroll around to launch to bypass the subscription activation dialog. We use prime, but not like we used to. getting harder to justify keeping it -- especially with how poorly the items are packaged and treated in shipping these