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“I founded Amazon The long-term mission 26 years ago was to make it the most customer-centric company on the planet. “Jeff Bezos (Jeff Bezos) testify Before the House Antitrust Subcommittee last summer. “Not every company adopts this customer-first approach, but we do it, which is our biggest advantage.”
Bezos’ obsession with customer satisfaction is at the core of Amazon’s self-mythology. For this reason, every action taken by the company only considers one goal: to satisfy customers. If Amazon has become the economic master of e-commerce, it is not because of any unfair practices or sharp elbows. This is simply because customers like it very much.
This Antitrust litigation A lawsuit filed against Amazon on Tuesday directly challenges this claim. The lawsuit filed by Washington, DC Attorney General Karl Racine focused on Amazon’s use of so-called “most-favoured-nation” clauses in contracts with third-party sellers, which account for most of Amazon’s sales. The most-favoured-nation treatment clause requires sellers not to offer their products at lower prices on any other website (even their own website). According to the lawsuit, this would harm consumers by artificially increasing the price of the entire Internet while preventing other e-commerce sites from competing with Amazon on price. Racine said at a press conference announcing the case: “I filed an antitrust lawsuit to terminate Amazon’s ability to control prices in the entire online retail market.”
For a long time, Amazon has publicly fulfilled DC’s allegations. Its “price parity clause” clearly requires third-party sellers to provide lower prices on other websites. It stopped in Europe in 2013 after the competition authorities in the UK and Germany started investigating it. However, in the United States, this rule lasted longer until Senator Richard Blumenthal wrote to the antitrust agency in 2018, implying that Amazon violated antitrust laws. A few months later, in early 2019, Amazon lowered its price parity.
But this is not the end of the story. DC lawsuit accuses Amazon of simply replacing new policy Use different languages to achieve the same results as the old rules.Amazon’s “market fair pricing policy” informs third-party sellers that they may be punished or suspended for various illegal activities, including “setting the price of a product or service significantly higher than the price offered by Amazon in the first or second half of the year. “This rule can prevent Price fraud For rare products, such as masks in the early stages of a pandemic.But it can also be used Swell The price of the goods that the seller wants to provide at a cheaper price.The key is Leave Amazon. In other words, if sellers list products cheaper on other websites, Amazon reserves the right to cut off sellers-just like under the old price parity clause.according to summary report The new policy submitted by the House Antitrust Subcommittee last year based on the testimony of third-party sellers “has the effect of preventing sellers from offering lower prices to consumers on other retail websites.”
According to sellers who publicly or anonymously provide evidence against Amazon, the main form of this price law is through manipulating access to the “buy box”, namely the “add to cart” and “buy now” buttons at the top. Amazon product listing rights. When you go to buy something, there are often many sellers trying to sell. Only one person can “win the buy box”, which means that when you click one of these buttons, they are the ones who get the sale. Since most customers won’t scroll down to see what other sellers are offering, winning the “buy box” is crucial for anyone who wants to make a living on Amazon. Like James Thomson, he is a former employee of Amazon and a partner of Buy Box Experts, a brand consulting firm for Amazon sellers. tell me In 2019, “If you cannot earn Buy Box, for all intents and purposes, you will not earn sales.”
Another long-time Amazon sales consultant, Jason Boyce, explained to me how this works. He and his partners were excited when the last third-party seller contract they signed with Amazon (selling sporting goods on the site) did not include a price parity clause. “We thought,’Great! We can offer discounts at Wal-Mart, Sears, and anywhere else.” But then something strange happened. Boyce (the person who spoke to the House investigator in the antitrust investigation) noticed that once his company lowered the prices of other sites, Amazon’s sales began to fall. “We went to the list, the “Add to Cart” button disappeared, and the “Buy Now” button disappeared. Instead, there is a gray box that says “View all purchase options”. You can still buy the product, but this It’s an extra click. Now, the extra clicks on Amazon are eternal-they’re all about immediate gratification.” In addition, his company’s ad spend plummeted because Amazon didn’t show users that there was no purchase Box product advertisement. “Then what did we do? We went back and raised prices elsewhere, and then everything was restored within 24 hours. Traffic has improved, clicks have improved, and sales have rebounded.”
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