May 26: Washington, DC’s attorney general filed a lawsuit against Amazon on Tuesday, alleging the online retailer broke antitrust law by requiring that third-party sellers not offer better deals for their products elsewhere.
Attorney General Karl Racine said Amazon requires third party sellers to give its customers the same or better prices than they offer elsewhere.
But since Amazon’s prices include fees, which can run as high as 40 percent of the total price, Racine said the policy could make prices for the same product more expensive on platforms that compete with Amazon.
The legal action is the latest of multiple state and federal suits filed against the largest tech companies in an effort to limit alleged abuses of their outsized market power.
Amazon disagreed with the lawsuit, saying its policies were aimed at keeping prices low.
“The DC attorney general has it exactly backwards – sellers set their own prices for the products they offer in our store. Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively,” an Amazon spokesperson said in a statement.
The company’s share price dipped on news of the lawsuit but quickly recovered.
The lawsuit, which was filed in DC Superior Court, put Amazon’s share of the US online retail sales market at between 50 percent and 70 percent.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximises its profits at the expense of third-party sellers and consumers, while harming competition,” Racine said in a statement.
The four big tech companies – Amazon, Facebook, Alphabet’s Google, and Apple – have spent more than a year under antitrust scrutiny.
The US Justice Department sued Google late last year alleging violations of antitrust law, as did two groups of states. Facebook was sued by the Federal Trade Commission and a group of states.