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Comment by thayne | Hacker News Reader

> Lots of retailers (both physical & online) have similar requirements

My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary.

> many manufacturers have similar requirements

That is a different situation, and is AFAICT legal in the US (but not in many other countries, and IMHO probably shouldn't be legal), at least in some situations, but there are limits.

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Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?

> Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price

The original wording was

>Amazon requires that anyone selling through their platform not offer lower prices elsewhere online.

which means if the seller offers to sell something on amazon for $x, but has a shopify site selling it for < $x, then that seller will get deranked. That's not the same thing as the lowest price, because it's possible that other sellers sell for higher prices, and some people might not find whatever obscure shopify site that has the lowest price.

The wording is admittedly ambiguous, but the fact that there are totally overpriced items available on amazon suggests amazon isn't deranking people just because it's not the best price on the internet.

It would expose distributors who are getting better deals than others when they can undercut the competition.

In the long run it is bad for consumers. If you sell widgets on amazon for $10, and amazon charges $2 or whatever, you pocket $8. Maybe you also want to sell your widgets on your own site where your overhead is only $1. The "most favored customer" clause prevents you from passing that savings on to the customer and charging $9 on your site (or any marketplace where you might prefer to sell things compared to amazon). It promotes stasis or growth of large sellers and prevents new ones from offering price competition.

No it prevents businesses from selling directly from their site at a discount, and eliminates any incentive consumers have to purchase a product outside of amazon. It's one of the ways they became a monopoly, in addition to selling at a loss until all the small businesses were forced to close.

If amazon was just ranking by price, that would be fine. But the described behaviour implies that they would derank a listing even if it was the cheapest option because it was made available by the same seller for cheaper elsewhere.

This kind of thing is ultimately bad for customers because it reduces competition between sales outlets, by making it very difficult for smaller players to compete on price.

As described in the OP, sellers didn't respond to this pressure by lowering prices on Amazon, they raised praises at other retailers. So the effect is to raise prices overall.

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