Amazon warns merchants antitrust bill could spell trouble

August 19, 2021 ,

Amazon has told some of its merchants who make use of its e-commerce services that antitrust proposals in the US Congress could prove detrimental to their businesses.

Back in June of this year, the US House Committee on the Judiciary signed off on legislation that will allow companies, including Amazon, to make the choice between running a platform and competing on it.

While the antitrust bills have gained bipartisan support, the fear for e-commerce outlets selling via Amazon’s marketplace is that the move could produce a serious challenge to the power of internet retailers and other big online tech firms.

According to media reports, discussions have taken place between Amazon staff and merchants, the details of which have been posted online by e-commerce advice blog EcomCrew. Amazon has confirmed that the post is genuine.

Amazon marketplace

In an email message, from one of the Public Policy managers at Amazon, a staffer noted: “We are concerned that (legislation) could potentially have significant negative effects on small and medium-sized businesses like yours that sell in our store. . . I’m hoping you might spare a few minutes later this week or next to chat on the phone.”

The proposed legislation, called ‘A Stronger Online Economy: Opportunity, Innovation, Choice’, could be used to clip the wings of online tech companies, including Amazon. Crucially, one aspect of the legislation called ‘The Ending Platform Monopolies Act’ could prove problematic for the likes of Amazon and Apple. 

Both could be affected, as it would clamp down on companies that offer own-brand products. Apple is well-known for its own products in the App Store, while Amazon has a huge range of its own private-label goods on offer, also under its own brand, with an estimated 150,000 products for sale via the e-commerce platform.

If passed, the legislation could force private-label brands to separate their products from the parent company. Ultimately, the move is seen as being positive for third-party sellers as it would level the playing field and create a more equal arena for selling goods online. However, Amazon is arguing that the proposed legislation could mean third-party sellers won't be able to sell through the platform.

In a statement, the online retailer said: “More than a half million American small- and medium-sized businesses make a living via Amazon’s marketplace, and without access to Amazon’s customers, it will be much harder for these third-party sellers to create awareness for their business and earn a comparable income. Removing the selection of these sellers from Amazon’s store would also create less price competition for products, and likely end up increasing prices for consumers.”

Via Reuters



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