Amazon.com Inc. (AMZN) - Get Report has removed a requirement that third-party sellers on their website offer their lowest prices only on the Amazon platform after years of criticism, the Financial Times reported, citing sources familiar with the matter.
Amazon has been facing intensifying criticism from politicians and sellers on their aggressive policies that tend to benefit Amazon the most. The move to toss the price parity provisions in the United States, also known as "most favored nation" clauses, comes after political pressure to investigate Amazon under antitrust laws.
The clauses prevented sellers who listed on Amazon's marketplace from listing their products more cheaply on other websites. Third-party sellers on Amazon's marketplace now account for half of all Amazon items sold, according to the paper.
Amazon already removed price parity provisions in the U.K. and Germany back in 2013 after the two countries also launched investigations into the practice.
The e-commerce behemoth is facing increasing scrutiny in the U.S., with the latest attack coming from presidential hopeful Sen. Elizabeth Warren. Last week, Warren said she would break up companies like Amazon, Google parent Alphabet (GOOG) - Get Report and Facebook (FB) - Get Report if she became president because they have become too large and monopolistic. Warren said breaking the companies up would spur competition and force them to be more responsive to users.
In December, Senator Richard Blumenthal sent a letter to the FTC criticizing Amazon's third-party selling requirements.
Former Amazon manager James Thomson told the Financial Times the decision to toss the provision could result in slower growth for Amazon. "The Marketplace has been historically a cash cow for Amazon," Thomson told FT. "If it becomes less competitive on price and consumers become less loyal, does that mean the third-party business is going to slow down?"
Amazon shares were down slightly to $1,668.12 in pre-market trading on Tuesday. They are up 11% so far this year.
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