Washington Attorney General Karl Racine has filed an antitrust lawsuit against him Amazon, claiming that the company has raised prices unfairly and illegally maintained monopoly power. The lawsuit alleges that Amazon used contractual provisions to prevent third-party sellers from offering their goods at lower prices elsewhere, according to CNBC.
“Today, my office filed an antitrust lawsuit against Amazon for illegally abusing and maintaining its monopoly power by controlling prices throughout the online retail market and violating the DC law,” Racine said. he wrote on Twitter. He said his office “filed this antitrust lawsuit to end Amazon’s illegal control of prices throughout the online retail market.” The lawsuit also seeks sanctions against Amazon and damages recovery.
Third-party sellers operating on the Amazon Marketplace are required to comply with the company’s business solution agreement. In 2019, among the antitrust regulators looking at the issue, Amazon removed a supply which forbade sellers to offer their products at a lower price on rival markets.
However, depending on the cause, Amazon added an almost identical clause to the agreement. Under this Fair Price Policy, Amazon can impose sanctions on sellers who steal their merchandise for less money elsewhere. Those include removing the purchase box, pausing the shipping option or suspending or terminating seller accounts.
“These agreements also impose an artificially high pricing plan across the online retail market and ensure that high fees charged to third-party sellers by Amazon – up to 40% of the product price – are incorporated not only in the price charged on Amazon, but also in the prices on competing platforms, ”Racine said.
Marketing is an important aspect of Amazon’s ecommerce business. It now accounts for half of the company’s sales.
“DC’s Attorney General is exactly behind the scenes – sellers are setting their prices for the products they offer in our store,” an Amazon spokesman told Engadget in a statement. “Amazon is proud of the fact that we offer low prices in the widest selection, and like any store we reserve the right not to highlight offers to customers who are not competitively priced. ‘AG would force Amazon to introduce higher prices to customers, going strangely against the main objectives of antitrust law.’
Other tech giants are on the rise antitrust scrutiny. Apple is the subject of a lawsuit by Epic Games in a banking lawsuit that just wrapped up. A sentence is pending in this case. Several attorneys general and federal agencies have filed lawsuits against him Google and Facebook in recent months. Racine’s office only goes to Amazon for now, but other states or agencies may join the case later.
Update 5/25 1:30 PM ET: Added the Amazon statement.
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