Canada’s Competition Bureau is taking further steps in its investigation into Amazon to determine if the e-commerce giant’s rules for sellers on the platform are an abuse of dominance under the federal Competition Act. The bureau is investigating the Amazon Marketplace Fair Pricing Policy, which allows the company to penalize sellers for certain actions, including listing an item for sale at a price that is considerably higher than a recent price that item had been offered at, either on Amazon or elsewhere. Third-party sellers have to agree to the fair pricing policy, which was first instituted in 2017, in order to sell their products on Amazon.
The bureau has obtained a court order that requires Amazon to hand over records and relevant information for the investigation. There is no conclusion of wrongdoing at this time, the agency said. The goal of the investigation is to determine if the policy forces sellers to charge customers more than they otherwise would for a product, if it prevents rivals from entering the market by preventing sellers from listing their prices at lower rates on sites other than Amazon, or if the policy otherwise lessens the price competition in the marketplace.
Amazon says that prices which “harm customer trust” might be removed as a featured offer by Amazon, have the shipping option suspended, or, in some cases, have their selling privileges suspended or terminated altogether under the fair pricing policy. For their part, businesses say the policy forces them to sell products at unsustainably low rates.
Amazon told CBC News that it would “continue to collaborate” with the Competition Bureau in an attempt to show the agency that its policies help consumers find what they’re looking for at low prices. “Our tools are designed to enable customers to make informed purchase decisions and maintain their trust, while supporting the thousands of Canadian businesses that sell through our store,” an Amazon spokesperson said in an email.
While the bureau’s announcement is a step forward in the investigation, William Wu, a partner at McMillan LLP in Toronto who practices competition law, said consumers and businesses won’t see any changes yet. Any future action will depend on whether the investigation reveals any wrongdoing by Amazon.
Red Deer’s Nederlof said he hopes the agency’s announcement might lead to a change in Amazon’s fair pricing policy. Michelle Auger, senior policy analyst with the Canadian Federation of Independent Business (CFIB), said she also welcomes the next step in the Competition Bureau’s investigation.
The CFIB released a report in 2023 that found small and medium-sized businesses in Canada were struggling as a result of Amazon’s dominance in the online marketplace. About half of the small businesses polled for that report said they were dissatisfied with their experience using Amazon’s marketplace. While the investigation’s next step is only an incremental change, Auger said she’s glad to see the federal agency taking action and hopes it might lead Amazon to be more transparent about some of its policies and pricing mechanisms in the future.
Source: CBC
