Amazon hits back at new bill designed to stop self-preferencing

Amazon has issued a critical response to new US legislation designed to limit the ability for large companies to promote first-party over third-party products and services.

The 22-page ‘‘American Innovation and Choice Online Act’’ features a range of recommendations that look to stop ecommerce platforms giving preference to their own products on their websites.

However, Brian Huseman, Amazon Vice President of Public Policy maintained in a recent statement that the bill “jeopardizes two of the things American consumers love most about Amazon: the vast selection and low prices made possible by opening our store to third-party selling partners, and the promise of fast, free shipping through Amazon Prime”.

What does the bill say?

The bill announces it is unlawful to “preference the products, services, or lines of business of the covered platform operator over those of another business user on the covered platform in a manner that would materially harm competition”.

Championed by Senators such as Amy Klobuchar and Chuck Grassley, the bill has been pitched as a way to protect small businesses.

The bill seems directly aimed at one company, as it only applies to parties with a “United States net annual sales of 10 greater than $550 billion, adjusted for inflation on the basis of the Consumer Price 13 Index”, excluding extremely large competitors like Walmart and Target.

Amazon claims the “vaguely worded” bill would force it to allow other logistics providers to fulfil Prime orders.

This could be good news for firms which currently aren’t favoured by Amazon’s ecommerce hosting regime. However, the ecommerce giant argued that should “legislation to become law, it would substantially degrade the value and quality of Prime, as many of the products sold in our store today with Prime’s one- to two-day delivery promise would be undeliverable in that time frame”.

Senators are due to vote on the bill within the next month.