Amazon’s Price Check app, which will empower online shoppers to scan product barcodes and compare them against similar offerings, has traditional retailers riled up and feeling threatened by what they say is Amazon’s most recent attempt to stifle competition.
The new app will be available on iPhone and Android devices.
“The online retail giant will then offer a $5 discount to shoppers who carry out this market research for it for free, on any item across the site, including the same item they wanted to buy in the first place,” reported The Telegraph on Thursday.
Competitors complain Amazon’s low pricing depends on its ability to “evade” collecting state sales taxes. In 1992 the Supreme Court ruled that if a taxpayer has no physical presence in the state in which he’s shopping, the state lacks sufficient “nexus” — or connection — to the taxpayer, and therefore may not collect the sales tax on that customer’s purchase. Brick-and-mortar retailers complain that the rise in e-commerce, however, is a result of online retailers exploiting that ruling.
The message from Overstock CEO Patrick Byrne was clear to competitors and government officials when he testified last week before a House Judiciary Committee hearing where members considered the economic online implications of current tax law. If states want online retailers to collect sales taxes, Byrne said, states should foot the bill for the software and the man-hours required to collect and pay those taxes.
The American Retail Leaders Association (ARLA) said in a statement that “retailers compete on price 365 days a year, and at no time is that competition hotter than during the make-or-break holiday shopping season.”
“However, by continuing to evade collecting state sales taxes, Amazon’s exploitation of a pre-Internet tax loophole is resulting in a 6-10 percent perceived price advantage over their competitors on Main Street,” said the ARLA statement.