Placement inside the Buy Box is a major driver of sales for companies that sell on Amazon, but if Amazon sees a product for sale at a lower price on another site, it will remove those two buttons and replace them with less enticing language and designs, which can sharply curtail sales.
“A price is considered uncompetitive even if it is just one cent above reputable retailers outside of Amazon,” Varun Soni, who leads Amazon’s seller pricing team, explained at a conference in October.
Amazon, led since last year by Andy Jassy, who replaced Jeff Bezos as chief executive, has previously argued that its Buy Box policies helped consumers by keeping prices low and delivery times short. But its design has been a source of antitrust scrutiny.
In September, the California attorney general sued Amazon, arguing that sellers often raise their prices on other websites to match the price on Amazon and keep their placement in the Buy Box, to the detriment of consumers.
The California complaint argued that it costs third-party sellers more to sell items on Amazon, so they can’t afford to cut prices on the site. Merchants would rather charge more on other sites to get the Buy Box back than risk cutting off sales on Amazon, by far the largest online retailer, the suit says.
In the E.U. settlement, Amazon also agreed to stop using nonpublic data about merchants that it competes with. Independent merchants who rely on Amazon to reach customers have long complained that the company uses information about sales terms, revenue and inventory to make decisions about what products to create, sell and promote, like its line of Amazon Basics products.
In another victory for independent merchants, sellers would also be able to participate in Amazon’s Prime program, its popular membership service, without using the company’s logistics business. That change will give sellers the option of teaming up with other providers to handle inventory and shipments.