Amazon’s latest antitrust case in DC could mean big things for Big Tech

Another attorney general is embarking on the Big Tech antitrust trial train: Washington, DC, Attorney General Karl Racine is denouncing Amazon to engage in anti-competitive acts which he says have raised prices and stifled innovation.

U complaint accuses Amazon of abusing its market position by requiring, in practice, that third-party sellers offer their products at the same price they sell elsewhere. This has raised the price of goods in general, the complaint says, which means DC residents pay more than they would otherwise.

While we watched him a few antitrust conventions from state attorneys general and federal agencies running Google and Facebook last year, it appears to be the government’s first antitrust lawsuit against Amazon, according to the New York Times. But, as it comes from the DC attorney general, it is limited only to DC residents. (Racine has also signed antitrust lawsuits against Facebook.) It is responding to some long-standing complaints about Amazon’s third-party market going well beyond the district, at a time when Amazon is one of the more visible targets of the Biden administration’s Big Tech antitrust push. . This push will soon have another ally in it Lina Khan, an antitrust, anti-Big Tech expert that is expected to soon join the Federal Trade Commission.

“This case is intended in a key way that Amazon imposes its dominance on the online marketplace,” Stacy Mitchell, co-director of the Institute for Local Self-Dependence, told Recode. “Amazon’s price parity policy allows it to charge high costs on sellers without losing consumers to cheaper sites.”

The policy of price parity in Amazon’s agreements with sellers that is explained in DC’s attorney general’s complaint is not new. In fact, the practice has attracted quite a bit of negative attention from lawmakers as Amazon dropped it from its retail contracts in 2019. But Racine says it didn’t go exactly right: The company just replaced it with a “Fair Price Policy” which does the same thing by punishing sellers who offer lower prices elsewhere by removing the “Buy Now” and “Add to Cart” buttons on their product pages.

Sellers, fearing lower sales or being chased by the largest online retailer on the entire global platform, are responding by lowering their prices accordingly – or raising them elsewhere. This, he says, has led to higher prices for consumers in general, since sellers are afraid to sell their products for less than what they sell for Amazon, which takes a toll on their sales.

“Amazon has used its dominant position in the online retail market to win at all costs,” Racine said in a statement. “It maximizes its profits to the detriment of third-party sellers and consumers, while harming competition, stifling innovation and illegally tilting the playing field in its favor. We have filed this antitrust lawsuit to end the illegal control of Amazon is pricing across the online retail market. ”

Amazon admits that it chooses which one offers the feature based on several factors, including price. But he does not agree with Racine’s take on the impact of this policy.

“DC’s attorney general has exactly come back – sellers are setting their prices for the products they offer in our store,” an Amazon spokesman told Recode. “The relief sought by AG forces Amazon to present higher prices to customers, going strangely against the main objectives of antitrust law.”

The cause is relatively small. It is only by an attorney general and targets a specific aspect of Amazon’s business practices. But it is not insignificant. Amazon has been in the crosshairs of state and federal lawmakers and regulators along with its Big Tech partners Google, Facebook and Apple for some time. This is the first lawsuit against Amazon to come out of this growing scrutiny, but it probably won’t be the last.

“This suit is another indication that the tide is changing – both policy makers and the public want Amazon’s excessive power to be reduced,” Mitchell said.

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