Sean Heather
Senior Vice President, International Regulatory Affairs & Antitrust, U.S. Chamber of Commerce
Published
January 31, 2025
In the waning days of the Biden's Federal Trade Commission (FTC), the agency engaged with Temu, the Chinese e-commerce site, and Chinese sellers regarding Amazon’s pricing practices. Back in 2023, FTC Chair Khan ushered through, along partisan lines, a case against Amazon. The case, among other things, alleges that Amazon’s practices are keeping prices artificially high.
The FTC’s outreach to Temu and Chinese sellers is not particularly surprising; it's arguably standard operating procedure. Such conversations are appropriate when they serve to better inform an agency’s understanding of how a market operates. Interestingly, the FTC complaint against Amazon not only alleges that prices are kept high on the company’s website, but that Amazon’s pricing practices force third-party sellers to keep prices high on other websites that compete against Amazon. In other words, regardless of where a consumer decides to shop, Amazon can keep prices high everywhere.
That is quite a claim.
It is basic economics that consumers will shop elsewhere if a store’s prices are too high. Thus, there is a strong incentive for retailers to keep prices competitive. Amazon accomplishes this through its Amazon Marketplace Fair Pricing Policy, which prohibits merchants from selling products at “significantly higher” prices than recent prices offered on or off Amazon. The policy works to ensure Amazon’s customers aren’t being overcharged.
According to press reports, the FTC’s interest with Temu is focused on Amazon allegedly telling Chinese sellers that sell both on Amazon and Temu that they must stop offering Amazon customers products at prices higher than what is being offered to Temu’s customers. Amazon’s efforts to enforce its pricing policy against Chinese merchants to lower prices for Amazon consumers blows a huge hole in the FTC’s claim that Amazon drives higher prices on Amazon and at other platforms like Temu.
Chinese sellers are free to sell on the platforms of their choice. But nobody should fault a company for requiring sellers to abide by pricing policies that are in the consumer’s best interest. Perhaps through the conversation with Chinese sellers the FTC will see the shortcomings of its own argument, as it is hard to imagine that the agency would go out of its way to prioritize complaints from Chinese merchants over Amazon enforcing its policy to seek lower prices for American consumers.
About the authors
Sean Heather
Sean Heather is Senior Vice President for International Regulatory Affairs and Antitrust.
