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Amazon warns merchants antitrust bill could spell trouble

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Amazon has told some merchants that make use of its e-commerce services (opens in new tab) that antitrust proposals in the US Congress could prove detrimental to their businesses.

Back in June, the US House Committee on the Judiciary signed off on legislation that will allow companies, including Amazon, to make the choice between running a platform (opens in new tab) and competing on it.

While the antitrust bills have gained bipartisan support, the fear for e-commerce outlets (opens in new tab) selling via Amazon’s marketplace is that the move could produce a serious challenge to the power of internet retailers (opens in new tab) and other big online tech firms.

According to media reports, discussions have taken place between Amazon staff and merchants, the details of which have been posted online by e-commerce advice blog EcomCrew. Amazon has confirmed that the post is genuine.

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In an email message, one of the Public Policy managers at Amazon noted: “We are concerned that [legislation] could potentially have significant negative effects on small and medium-sized businesses like yours that sell in our store.”

The proposed legislation, called ‘A Stronger Online Economy: Opportunity, Innovation, Choice’, could be used to clip the wings of online tech companies, including Amazon. Crucially, one aspect of the legislation called ‘The Ending Platform Monopolies Act’ could prove problematic for the likes of Amazon and Apple. 

Both could be affected, as the new rules would clamp down on companies that offer own-brand products. Apple is well-known for its own products on the App Store, while Amazon has a huge range of its own private-label goods on offer, also under its own brand, with an estimated 150,000 products for sale via its e-commerce platform (opens in new tab).

If passed, the legislation could force private-label brands to separate their products from the parent company. Ultimately, the move is seen as being positive for third-party sellers as it would level the playing field and create a more equal arena for selling goods online (opens in new tab). However, Amazon is arguing that the proposed legislation could mean third-party sellers won't be able to sell through the platform.

In a statement, the online retailer said: “More than a half million American small- and medium-sized businesses make a living via Amazon’s marketplace, and without access to Amazon’s customers, it will be much harder for these third-party sellers to create awareness for their business and earn a comparable income. Removing the selection of these sellers from Amazon’s store would also create less price competition for products, and likely end up increasing prices for consumers.”

Via Reuters (opens in new tab)

Rob Clymo
Rob Clymo

Rob Clymo has been a tech journalist for more years than he can actually remember, having started out in the wacky world of print magazines before discovering the power of the internet. Since he's been all-digital he has run the Innovation channel during a few years at Microsoft as well as turning out regular news, reviews, features and other content for the likes of TechRadar, TechRadar Pro, Tom's Guide, Fit&Well, Gizmodo, Shortlist, Automotive Interiors World, Automotive Testing Technology International, Future of Transportation and Electric & Hybrid Vehicle Technology International. In the rare moments he's not working he's usually out and about on one of numerous e-bikes in his collection.