Legal Briefs Podcast: When Amazon's Own Discounts Trigger a MAP Violation

IndyPet executive director Todd Dittman brings his members' question straight to Jeremy Richardson: what can an independent retailer actually do when Amazon's own discount triggers a MAP violation that isn't the retailer's fault?

This episode brings a retailer's-eye view to a topic covered from the brand's side back in Episode 1: Amazon's practice of quietly discounting a third-party listing itself. Guest Todd Dittman, executive director of the independent pet retailer trade association IndyPet, brings his members' real-world frustration directly to attorney Jeremy Richardson: their Amazon storefronts get flagged for MAP violations they didn't cause, and non-Amazon sellers get dragged into the same price drop as repricing bots elsewhere in the market react to Amazon's own discount.

Jeremy reiterates that whether this counts as a violation is ultimately the brand's call, and revisits the retailer's dilemma: opting out of Amazon's discount program isn't a per-listing choice, it's all-or-nothing across the entire storefront. His suggested middle ground for brands: treat Amazon-driven discounts like a temporary MAP holiday rather than a violation, or work to differentiate the Amazon SKU so the rest of the channel isn't affected, and he confirms that monitoring technology (like MAPP Trap's) can actually detect which price drops are Amazon-subsidized, giving brands the information to make that call deliberately instead of by default.

• The retailer's bind: Amazon's discount program can only be opted out of store-wide, not SKU by SKU, so retailers can't cleanly protect just their MAP-sensitive listings.
• Spillover effect: non-Amazon sellers' repricing bots often react to Amazon's discounted price too, spreading the drop across the whole channel.
• Suggested brand response: treat Amazon-subsidized discounts as a temporary MAP holiday rather than a violation, or differentiate the Amazon-channel SKU.
• The technology exists to flag which violations are Amazon-subsidized, so brands can make an informed, consistent call rather than guessing.

Full Episode Transcript

[00:00] Welcome to MapTrap's legal briefs, the podcast where we explore specific strategies and tactics used by brands to protect their pricing, distribution, and intellectual property rights. The information in this podcast is provided for general informational purposes only. It is not legal advice. Listening to this podcast does not create an attorney-client relationship between you and MapTrap's guest presenters. Listeners should seek legal advice from a lawyer licensed in the listener's state.

[00:25] Hello and welcome to another episode of MapTrap's legal briefs where we talk all things brand protection. Joining me today is usual is Jeremy Richardson, partner in the law firm of Smith-Gambrell. He's an expert on all consumer product issues and IP policy day-to-day issues that brand owners need to address. And also joining us today is kind of a departure for us is Todd Ditman. Todd is the executive director of IndyPet, a nonprofit trade association whose mission is to empower independent and neighborhood pet retailers to work together as peers for the well-being of pets and pet owners as they maintain a strong, sustainable, and growing place at the heart of the pet industry. Todd's role is to implement the board of directors' strategic plan and run the operating committees who are initiating the plan. And one of the ways to help IndyPet members is through education. So Todd has a question about brand policies and how they affect independent retailers, some specific thoughts and ideas. Todd, welcome.

[01:30] Thanks, Ron. I appreciate it. And Jeremy, thanks for addressing these questions. The question I have today is I have a few retailers are a portion of retailers who utilize Amazon as a sales outlet. And there are times that Amazon will implement a Amazon discount that forces a map violation. Can you address this legal?

[02:02] What can be done about this?

[02:10] Hi, Todd. Nice to hear you again and Ron. Nice to hear you as well. Glad to be here as always.

[02:16] Yeah, this is a really cool, a really cool issue and something that I will admit sort of surprised me when I first learned about discounts provided by Amazon. So let's start by describing what this program is. Amazon will itself take a retailer's product and lower the price with a discount that Amazon pays for. So let's say the retailer on Amazon has a product that's selling for $10. Amazon will provide and pay for a $2 discount to lower the price to $8. And that $8 price often gets picked up by price scrapers and other software that goes to detect the advertised price. So we talk about this in terms of a map policy, it often will show up as a map violation. Even though the retailer itself is not violating a brand's map price. So it's a strange situation, it comes up as a map violation, but the retailer says I didn't do it. So let's talk about how that gets addressed and whether it in fact is a map violation. I would say that it is really up to the brand owner and how it interprets its own map policy to determine whether that is a violation. And I personally think and died my clients to say no, it shouldn't be a map violation because this is not something that the retailer is setting. This is something that Amazon is doing outside of the retailer's control and therefore I have a quick question. I'm going to speak as the brand that I know about this Amazon provided discounts program. And this isn't something that they have to subscribe to. A brand can a retailer on Amazon can say no, I'm going to opt out of this program.

[04:13] Yeah, that's exactly right. And that is why some brands will view this as a map violation. The rub here is that a retailer on Amazon cannot opt out, but it has to opt out across all aces across all products sold on Amazon. So in the case where Jeremy, the brand owner says, hey, this is a violation, I want you to opt out. The retailer is stuck opting out across all products, Jeremy's and Ron's and Todd's not just Jeremy's. So it's something that can be done. And it is certainly within the discretion of the brand owner to say it's a violation and they'd be right if they decided to take that position. But I think the other side is it's really sort of sticking it to the brand. I'm sorry to the to the retailer who's stuck in the middle dealing with Amazon, where Amazon is providing that discount. So a follow up question to that. What about my retailers who have nothing to do with Amazon and they just get caught up in trying to compete with that price that's below map?

[05:16] That's great follow up Todd because obviously Amazon is not just monitoring its own ecosystem. It it sees the price off Amazon. And that's why it imposes this count to make Amazon and it sellers more competitive. But all of the other non Amazon sellers out there with reprising bots. Those reprising bots don't necessarily recognize this as an Amazon imposed discount. And so all of a sudden the entire ecosystem drops the price because Amazon decided in its in its own godlike position to drop the price. And so that's a big question. Jeremy, is there anything on that?

[05:55] Yeah, Todd, you have with that question cut to the absolute core of what is a map policy and what is it supposed to do?

[06:01] And this is what we talk about all day long with brand protection. The the whole point of a map policy is to protect brand image to prevent a brand from being seen as a discount brand as being cheapened by lower advertised prices than then properly reflect the brand image. So it's a very tough question and you're absolutely right. You know, when when Amazon provides that Amazon provided discount a $2 discount, for example, it's not just affecting the world of Amazon. It's affecting all e-commerce and even brick and mortar stores who want to chase that price down. So what can you as a brand do?

[06:37] Maybe you do have to take that stronger position. And now, you know, maybe I'm going to reverse myself and think differently. It is it's a real issue. It's a real problem. Something you might want to do because often I believe our limited time offers, they're not continuing for months and months and months is just elect not to enforce the map violation where the Amazon provided discount applies, treat it like a map holiday, give your retailers who are and or not on Amazon the opportunity to chase that price for a period of time. But again, that's that's a tough decision because if other retailers drop their prices, Amazon going to continue with that. Amazon provided discount I just don't know. It may be that you want to do something to again, differentiate the product, differentiate the product that's on Amazon. So it doesn't affect the outside of Amazon world. But these are these are tough questions and real struggles for business owners. I think practically speaking, this cuts to technology. Can a can a scraping company, right, a price monitoring company actually detect whether or not it's an Amazon provided discount or not. The answer is yes, we can do that, we do that. And then it would be on on the brand to turn around an issue of a map holiday on that particular item. It might be a bit onerous for the brand, but I think in a in a fair world, it's something that they could do. Todd, I thought this was a really thoughtful conversation. I enjoyed it.

[08:12] Thank you. Is there anything else that you want to follow up with?

[08:16] No, that you really covered it all for us on this particular topic, but I'd like to take the opportunity to offer anybody listening to this. Any retailers listening to this, if you have other topics that you want me to bring up to the team here, please feel free to reach out to me via my website, indepet.org, that's i-n-d-i-e-et.org, and I will put it on the list for questions for Jeremy.

[08:51] Well, that's great, Todd. Thank you for some great questions and Jeremy, again, thanks for some great answers. And to you listeners, thanks for listening to another episode of legal briefs. And if you have any recommendations for us, please send an email to legalbriefs at maptrap.com. And have a good day. If you'd like to submit a question or topic for a legal briefs podcast, email them to legalbriefs at maptrap.com. For more information about how maptrap can help you with your online brand protection needs, visit www.maptrap.com.