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Amazon Prohibits Top Sellers from Discounting Prices Elsewhere
by Lina Khan (Finally) Sues AmazonOctober 23rd, 2023
Too Long; Didn't Read
Amazon enforces strict contractual restrictions through its "Amazon's Standards for Brands" (ASB) program, which applies to both established brands and newcomers. These restrictions are crucial because ASB sellers constitute a substantial portion of Amazon's marketplace sales. Amazon wields these restrictions to prevent sellers from offering lower prices elsewhere, threatening to revoke their selling privileges entirely if they violate the ASB policies. These policies, in conjunction with other strategies, effectively maintain Amazon's monopoly, drive prices higher, and hinder potential competitors.People Mentioned
FTC v. Amazon Court Filing, retrieved on Sep 26, 2023, is part of HackerNoon’s Legal PDF Series. You can jump to any part in this filing here. This is part 38 of 80.
b. Amazon continues to contractually prohibit its most important sellers from discounting elsewhere
286. Amazon places additional limits on certain sellers’ ability to sell products at lower prices on other online stores. These restrictions are embedded in the “Amazon’s Standards for Brands” (“ASB”) program.
287. Amazon applies ASB to brands, brand licensees, and brand representatives that use Amazon’s Marketplace (“ASB sellers”), regardless of whether their brand is a long-established household name or an upstart few people would recognize. (Redacted)
288. ASB sellers are an especially important type of seller to Amazon for two reasons. First, ASB sellers constitute (Redacted) In 2021, (Redacted) % of Amazon Marketplace sales were by ASB sellers, and Amazon projected they would sell more than (Redacted) of products on Amazon in 2022.
290. Amazon implemented ASB in September 2018 through an amendment to the Business Solutions Agreement. All sellers, including ASB sellers, must agree to Amazon’s Business Solutions Agreement in order to sell on Amazon’s Marketplace. The ASB restrictions are therefore binding contractual obligations that Amazon imposes on ASB sellers.
291. Through ASB, (Redacted)
292. Amazon also (Redacted)
293. (Redacted)
294. Amazon threatens an ASB seller’s “privileges”—including the “privilege” to “operate as a seller in the Amazon store altogether”—if the ASB seller violates any part of ASB. In other words, Amazon threatens not just to kick ASB sellers’ offers out of the Buy Box but to boot them out of Amazon’s Marketplace altogether if (Redacted)
295. In addition to revoking some ASB sellers’ selling privileges in full by shutting down their seller accounts, Amazon also (Redacted) under the guise of ASB policy enforcement, Amazon (Redacted)
296. (Redacted)
297. (Redacted)
298. (Redacted)
299. In 2019, Amazon (Redacted)
300. In late 2021, (Redacted)
301. Amazon (Redacted)
302. The Amazon team responsible for ASB has (Redacted)
303. (Redacted)
304. ASB—(Redacted)—are thus additional elements working across Amazon’s business in tandem with Amazon’s other strategies that punish off-Amazon discounting, stifle competition, impede the growth of potential competitors, hike prices, and degrade quality for consumers in the relevant markets.
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This court case 2:23-cv-01495 retrieved on October 2, 2023, from ftc.gov is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.
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