In an announcement earlier this month, Amazon said it would no longer force 3rd party sellers to price their products lower on Amazon than any other retail site or marketplace platform. These “Price Parity Agreements” or “Most Favored Nations Clauses” (MFNs) were used in Amazon contracts with 3P sellers to ensure that these sellers did not undercut Amazon on price on competitive platforms like eBay or WalMart.
The move comes after increased scrutiny out of Washington, as Senator Richard Blumenthal (D-CT) wrote a letter to the Justice Department and the FTC in December demanding an investigation into the “anti-competitive provisions in Amazon’s contracts”. Senator Blumenthal said in response to the policy change “Amazon’s wise and welcome decision comes only after aggressive advocacy and attention that compelled Amazon to abandon its abusive contract clause”. The change went into effect on March 11th, but large technology firms like Amazon, continue to come under increased scrutiny from Federal Regulators for potential antitrust violations.