Brussels is asking Amazon sellers about pricing

The European Commission has started questioning businesses that sell on Amazon about whether the marketplace penalises them for listing a product more cheaply somewhere else. The questions go out through questionnaires, they are at an early stage, and they have not become a formal investigation or a finding of wrongdoing.

That is the whole of what exists, and it is worth saying plainly at the top, because the most expensive mistake available this week is to read a regulator asking questions as a regulator having ruled. Nothing has been opened. No case number exists. But the questions themselves are informative, because they name, on the record, the constraint that European operators have been pricing around in private for years.

What the Commission is asking about

The subject is price parity: whether Amazon imposes rules, formally or through the behaviour of its systems, that disadvantage a seller who offers the same product at a lower price on a rival marketplace or on their own website.

The Digital Markets Act bans that kind of requirement. A gatekeeper is not allowed to stop a business offering better terms on a competing platform. The wording of the ban is about clauses in contracts, and the interesting part of what the Commission has said is that it is looking wider than clauses. A Commission spokesperson described the work as “regular dialogue with Amazon and its business customers to monitor compliance with the parity ban requirement”, and the Commission has said it will continue assessing whether gatekeepers are using alternative practices that could produce similar effects.

Read that sentence twice if you run a store alongside Amazon. “Alternative practices that could produce similar effects” is regulator language for the thing every operator has felt: nobody made you sign anything, and yet the buy box goes quiet when your own site undercuts the marketplace. Whether an algorithm suppressing a listing counts as a parity requirement is the open legal question, and it is the question that decides whether this goes anywhere.

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What one seller has put on the record

The reporting that opened this, by Bloomberg, carries one named example. Jack Nekhala, the inventor of the Bed Scrunchie, said that if his company sold the product at a lower price on its own website, Amazon could reduce its visibility on Amazon’s marketplace.

One seller’s account is not evidence of a market-wide practice, and it should not be treated as one. What it is, is an operator willing to describe the mechanism with a name attached, which is rarer than the complaint itself and is the kind of material a regulator can actually use. Amazon’s answer is that it is “committed to complying with the DMA and we always engage constructively in the commission’s ongoing regulatory oversight”, and that it does not use parity clauses incompatible with the Act.

What does not exist, and why that matters

This is the part of the story most likely to be got wrong, so here is the inventory. There is no European Commission press release. There is no case number. No proceeding has been opened, no statement of objections has been issued, no deadline has been set and no fine has been proposed or imposed. Nobody has published how many sellers were sent a questionnaire, in which member states, when, or what they answered.

So there is no denominator anywhere in this story. That is not a criticism of the reporting, it is the nature of a preliminary enquiry: the Commission does not publish at this stage, and it is not obliged to. But it does mean that any number attached to this story, any count of sellers, any timetable, any fine figure, has been invented by whoever is showing it to you. Treat a number here as a warning sign about the source.

It also means the story can end quietly. Early-stage enquiries frequently do. An operator planning around a formal case is planning around something that does not exist.

Why an operator should still care

Because the constraint is real whether or not the case is, and because the cost of it is already in your numbers.

Most European sellers of any size run a marketplace presence alongside their own store. The own store carries no referral fee, so the same unit earns more there, and the obvious move is to pass some of that saving to the customer. The reason most operators do not is the suppression risk: a pricing decision made by fear of a platform response rather than by margin. It is one of the few places where a competition file could change a business model rather than just a contract.

Who is exposed and who is not

The exposure is not evenly spread, and it is worth knowing which group you are in before you spend any attention on this.

The group with the most at stake is brand owners who control their own retail price across channels: a brand with a Shopify or equivalent store, a full Amazon catalogue, and the freedom to set a different number on each. For them the constraint bites on every product, every day, and it sets the ceiling on how much traffic the own store can profitably win.

Resellers are affected differently. If you do not control the brand’s pricing, or you sell only on marketplaces, the parity question is largely somebody else’s. What reaches you instead is second order: if the enquiry eventually loosens the floor price, the brands you resell may start undercutting you directly from their own stores, which is a competitive problem rather than a compliance one.

For the business operator

Nothing about this requires a compliance response, because there is nothing to comply with. What it does justify is evidence gathering, and the case for doing that now is simply that evidence collected after the fact is worth much less.

Be specific about which metric moved. The featured offer on your own listing, search placement for the main terms, and your share of the listing’s traffic are three different measurements that move for different reasons. A log that says “visibility fell” is worth very little. A dated series naming the metric is evidence.

Separate the two explanations. Listings go quiet for many reasons: a competitor undercutting, a stock-out, a fee change, seasonality. A log that does not rule those out will not survive contact with anyone sceptical, and you are the person best placed to rule them out.

Know your own terms. Read what you have actually agreed about pricing across channels. The difference between a written clause and an unwritten pattern is precisely the distinction being tested.

From the consumer’s side

It is worth turning the story round, because the shopper is the reason the rule exists and is largely absent from the way this gets written up.

The parity ban was not written to protect sellers. The harm it names is a shopper who never sees a lower price that would otherwise have existed, because the seller who wanted to offer it could not afford the consequences. Read that way, the questionnaires are a regulator asking sellers to describe a price the public has never been shown.

What a shopper sees today is the same number wherever they look. That has a consequence most brands misread as a marketing problem: there is no reason to leave a marketplace where the payment details are saved, the delivery is understood and the returns are easy, in order to buy the identical product at the identical price from a site you have never used. The own-store channel is not underperforming because the advertising is weak. It is underperforming because it has nothing to offer that the marketplace does not.

If the constraint loosened, the first visible change would be a spread. The brand’s own site would become the cheapest place to buy its own product, which is the one proposition that reliably moves a shopper off a marketplace. That is why this matters more than an early-stage enquiry usually would, and it is also worth saying that the Commission has published no estimate of what parity currently costs shoppers. The consumer harm is the premise of the rule and nobody has put a number on it either.

What to watch

The next meaningful event is binary and public: either the Commission opens a formal proceeding, which it announces, or it does not. Until one of those happens there is no new information in this story, however many outlets write it up. If a proceeding does open, the thing to read is not the headline but the scope, because whether it covers algorithmic visibility as well as contract terms determines whether it reaches the practice operators actually experience.

The three-line version

If you run the marketplace or the own-site channel. Start the dated suppression log now, with the price on each channel and the metric that moved. The line to take upward is that we price around a platform constraint a regulator has begun asking about, and there is no case to act on yet.

If you have just taken on multi-channel pricing. The reason your own store is not cheaper than the marketplace is almost certainly not marketing, and nobody will have written the real reason down.

If you sign the budget. There is nothing to buy. Refuse anyone selling compliance readiness for a case that has not been opened.

Sources

Briefs.co, EU probes Amazon over alleged price parity rules: https://www.briefs.co/news/eu-probes-amazon-over-alleged-price-parity-rules/

ChannelNews, Amazon faces EU scrutiny over alleged seller price restrictions: https://www.channelnews.com.au/amazon-faces-eu-scrutiny-over-alleged-seller-price-restrictions/