E-Commerce Wars: Amazon’s Price Check app

January 30, 2012

dollar computerThe war between electronic commerce retailers and their bricks and mortar counterparts consists of many different battles. 

One of the most recent battles was initiated by online retailer, Amazon.

This and other conflicts illustrate the opportunities and the challenges for commercial competition offered by e-commerce systems.

Amazon’s new mobile application, “Price Check,” offers a useful and valuable capability for consumers. 

The Price Check app enables individuals to use mobile communications devices to compare quickly and easily product prices offered by diverse vendors.

A shopper in a brick and mortar store can now use his or her cell phone or other mobile device to compare the prices of products in the store with the same product offered by online retailers. 

The mobile capability enables customers to make timely comparisons between in-store and online product prices.

As part of its promotion of the Price Check offering, Amazon gives consumers a discount for using Price Check.

A shopper who runs a Price Check comparison of three qualifying items receives a five percent discount (up to a five dollar value) for online purchases of those items.

Bricks and mortar retailers have generally voiced strong objection to Price Check.

They contend that the system represents anti-competitive conduct by Amazon on behalf of online retailers.

They argue that the Amazon discount places bricks and mortar stores, particularly small stores, at a significant competitive disadvantage.  The retailers have taken their complaints to Congress.

In response, Senator Olympia Snowe asked Amazon to terminate the Price Check discount, based on its alleged adverse impact on small bricks and mortar stores.

Amazon asserts that Price Check and the associated discount enhance competition.

The company contends that the system is of benefit to consumers, helping them to access lower product prices.

Amazon also notes that many of the products accessible through online vendors using the system are provided by small online retailers.  Price Check, according to Amazon, is a potentially valuable tool for small online retailers.

The conflict over Price Check will not be the final battle in the war between brick and mortar stores and online retailers. 

It is important to recognize, as policymakers address these conflicts, that technology offers great potential to empower consumers.

Public policy should be designed to facilitate widespread consumer access to product information and to encourage comparison shopping.

Online systems such as Price Check are valuable tools for consumers and should be encouraged, not impeded.

For more information on Alliance Law Group, LLC, Jeff Matsuura, or Crag Blakeley, please visit the ALG website.  For more information on information technology law, see their book Global Information Technology Law, 2011 ed.