UK regulator: Sellers using sites like Amazon are trying to fleece buyers by not competing

Sellers on Amazon were breaking the rules

The UK’s competition regulator has found evidence that online retailers are colluding and scamming buyers out of money by agreeing to not compete or undercut each other’s prices.

The Competition and Markets Authority (CMA) says it has sent warnings to a number of online retailers, that have been possibly breaking the law. By using digital marketplaces, like Amazon and Ebay, retailers should, in theory, compete with each other and offer users the best deal possible. That’s the basic, free market.

However, the regulator found that some of these vendors had been communicating with each other, agreeing on set prices, and essentially signed a non-compete agreement among themselves. However, the CMA has not started a full investigation yet, instead just sending warning letters to the possible law-breakers. CMA’s senior director, Stephen Blake, explained:

Online markets are a hugely valuable tool for consumers to shop around and find the best value products, making the most of effective competition. But these benefits for shoppers are put at risk if the suppliers seek to restrict competition between them. Entering into agreements that limit price competition cheats consumers, is illegal and can have serious consequences for the companies and individuals involved.

The CMA said that if its warnings weren’t heeded, it will start a full investigation, which much more drastic consequences for those involved. To be clear though, Amazon and Ebay are not directly targeted; third party sellers that make use of those marketplaces were the ones at odds with the rules.

Given that the winter holiday shopping season is almost upon us, making sure that online vendors are being honest and playing by the rules is very important to consumers everywhere.

Source: The Guardian

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