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On line shopping giant Amazon accused of artificially inflating prices

Tuesday, January 31st 2012 - 05:13 UTC
Full article 5 comments
Malcolm Harbour: time to investigate if Amazon is exploiting market power Malcolm Harbour: time to investigate if Amazon is exploiting market power

On line shopping giant Amazon has been accused of artificially inflating prices by banning firms that trade on its website from selling goods more cheaply elsewhere on the internet.

Thousands of shops and small businesses sell their products on US Corporation Amazon, which has seen its worldwide sales surge by 44%. But under draconian new restrictions, traders who sell products more cheaply on other sites face expulsion from the Amazon catalogue unless they agree to raise their prices.

Consumer protection lawyers called for an investigation on Monday.

Jill Paterson, a partner at UK law firm Leigh Day, said: “This is potentially anti-competitive behaviour. It has the potential to distort the market, which means consumers are losing out.”

She said Britain's Office of Fair Trading should look into it. Business organisations and independent traders have accused the company of bullying smaller firms.

Malcolm Harbour, chairman of the European Parliament's Consumer Protection Committee, said it was time for an investigation into whether companies such as Amazon were “exploiting their market power in a way that is detrimental to consumers”.

In the UK, Amazon has achieved an extraordinary domination of the online shopping industry, with analysts estimating it has a 20 per cent share of the market.

Until 2002, Amazon's business was confined to direct sales from its website. It then launched a scheme called Marketplace, allowing goods provided by shops and independent businesses.

And last year it changed the small print of its contract with traders, introducing the price parity demand. Many agreed to the deal rather than risk confrontation with the internet giant, but now an increasing number are voicing concern at what they claim are unfair trading terms.

 

Categories: Economy, International.

Top Comments

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  • Yuleno

    Now this is a very interesting matter.But surely,in a capitalist globe,it is an expected manifestation.
    Now the question is,does the state interfere or is it the Market that will correct.

    Jan 31st, 2012 - 01:55 pm 0
  • Teaboy2

    Its not a matter of the state interfering (though i guess your used to that in argentina) its a matter of law itself, and most western laws make it clear that such actions are in breach of anti competition laws. Not only that, businesses have the right to sell their products at a price of their own choosing and not at the choosing of another company who has no ownership of said products.

    Amazon is merely providing an online service to other companies allowing them to sell their products via amazon, where amazon already charge a percentage of the sale value for each order placed as well as a monthly subscription charge for using amazon merchant services. So there is no need for amazon to tell people they are not to sell their items at lower prices elsewhere. Its a clear breach of competition laws by amazon, in a vein attempt to stop companies selling their products elsewhere at lower prices then they have listed on amazon.

    Jan 31st, 2012 - 03:05 pm 0
  • Yuleno

    Your being very simplistic in this matter.Amazon know that small companies use them to gain business and they can exclude them from their site if they want to.There's no question of competition law involved.This is Internet trading

    Jan 31st, 2012 - 09:37 pm 0
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