March 14, 2019

Amazon Deletes Pricing Parity Provision from Contracts with Third-Party Marketplace Sellers

gettyimages-664378708.jpg amended its agreements with third-party marketplace sellers to remove its pricing parity clause—indicating that Amazon no longer will prohibit its 3P sellers from selling their products for less on competing online marketplaces.

The Amazon Services Business Solutions Agreement used to require that 3P sellers maintain parity between the prices of the products they sold on Amazon and those they sold through all other online sales channels. The current version of the Agreement makes no reference to parity, permitting sellers to list products for lower prices on other sites than they list them for on Amazon.

Scholars suspect that Amazon’s deletion of the parity provision was in response to suggestions from antitrust experts and members of Congress in December 2018 that pricing parity provisions could “stifle market competition and artificially inflate prices on consumer goods.” Amazon had already removed the parity clause for sellers on its platforms in the EU in 2013 and Japan in 2017. Amazon confirmed the change in the U.S., but has not commented on it.

For manufacturers and brands—this change adds another layer of complexity to channel strategy and the need to assert better control over online sales.

Please contact Daren Garcia of Vorys eControl should you have any questions regarding how this development might impact your business and legal strategies.