DC Attorney General Karl Racine filed a lawsuit against Amazon accusing the company of “anticompetitive practices” in its treatment of vendors on its online platform.
According to the antitrust lawsuit, the e-commerce giant artificially raises prices for consumers by fixing prices via its contracts with third-party sellers, and preventing them from offering their products at lower prices or on better terms on other websites, including their own.
As per these contracts, vendors are forced to pass on the cost of Amazon’s high fees — which may be up to 40 percent of the product’s price — to consumers not only on Amazon’s platform but also any other online retail website.
Through these agreements, the company creates an artificially high price “floor” across the online marketplace, blocking vendors from offering lower prices for the same products on other platforms, and maintaining monopoly power, which is against the District’s Antitrust Act,” the Office of the Attorney General (OAG) explained in a release.
We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
— AG Karl A. Racine (@AGKarlRacine) May 25, 2021
Other accusations in the complaint include stifling competition in the online retail market by preventing other platforms from competing to win market share, and depriving consumers of choice.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” Racine said. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon said it removed its price parity policy in 2019, but it actually quietly replaced the policy with a similar one called Fair Pricing Policy, which allows the company to sanction or remove third-party sellers from its platform if they offer their products for lower prices or under better terms on another platform, according to OAG.