Amazon has been hit with another lawsuit for alleged violations of antitrust laws, this time by Washington D.C. Attorney General Karl A. Racine.
Racine filed the lawsuit on behalf of the District of Columbia in Washington D.C. on May 25, alleging that the online retailer violates the District of Columbia Antitrust Act with anticompetitive business practices.
The lawsuit claims that Amazon’s “anticompetitive conduct harms consumers, third-party sellers, and competition through higher prices and less choice,” and the company’s online retail sales platform benefits from, and is protected by, its anticompetitive business practices.
“Far from enabling consumers to obtain the best products at the lowest prices, Amazon instead causes prices across the entire online retail sales market to be artificially inflated, both for products sold on Amazon’s online retail sales platform and on its competitors’ online retail sales platforms,” the claim states.
Racine says that Amazon dominates the online retail sales market, controlling between 50-70 percent of all online retail sales in the United States, and holds an even larger market share of multi-seller online retail platforms, such as Walmart.com and eBay.
For most Americans, Amazon is the first place they turn to buy something online, and given Amazon’s dominant market share and massive customer base, over two million independent, third-party sellers rely on Amazon’s online retail platform to sell their own products, the lawsuit says.
The claims says that Amazon’s Business Solutions Agreement – which until 2019 included a clause that explicitly prohibited third-party sellers from offering their products elsewhere, including their own websites, at a lower price – is central to the company’s antitrust violations. The prohibition was called the “price parity provision” (PPP).
The claim says that the PPP suppressed competition and artificially raised the price of goods to consumers across the online retail sales market, as third-party sellers were forced to incorporate Amazon’s high fees and costs into their product prices market-wide.
In 2019 amidst growing political pressure, Amazon got rid of the PPP. However, the company quickly replaced it with an effectively-identical substitute, its Fair Pricing Policy (FPP), the lawsuit says.
The FPP permits Amazon to impose sanctions on a third-party seller that offers a product for a lower price or with better terms on a competing online retail sales platform.
This includes banishing the seller from the Amazon platform which, given Amazon’s dominance in the online retail sales market, can result in devastating economic consequences, the claim states.
“The anticompetitive impact of Amazon’s conduct is compounded by a complex scheme of fees and extra charges—sometimes equaling up to 40 percent of the total product price— that Amazon imposes on TPSs to sell their products on Amazon’s platform,” the lawsuit says.
Racine wants the Court to enjoin Amazon from engaging in these and similar anticompetitive practices; provide other appropriate injunctive relief; order restitution and damages for harmed consumers; impose civil penalties to deter future misconduct by Amazon and others; and award attorneys’ fees and costs.
Amazon is also facing a raft of other legal actions, including another antitrust lawsuit filed in April by an Illinois shop alleging Amazon and other top five publishers conspired to drive up book prices and put small stores out of business.
Has the ease of shopping on Amazon meant you visit your local stores less? Let us know in the comments section!
The District of Columbia is represented by Kathleen Konopka, Catherine A. Jackson, and Jennifer C. Jones of Public Advocacy Division Office of the Attorney General for the District of Columbia and Swathi Bojedla, Paul T. Gallagher, Hilary K. Scherrer, Leland Shelton, Theodore F. DiSalvo, and Halli Spraggins of Hausfeld LLP.
The Amazon Antitrust Lawsuit is District of Columbia v. Amazon.com, Inc., in the Superior Court of the District Of Columbia.
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15 thoughts onWashington District Attorney Sues Amazon for Anticompetitive Practices, Violations of Antitrust Law
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Please add me to this litigation
Add me. I am a seller
Amazon has repeatably sent unauthorized charges to my bank account and it has caused me to have to shut y debit card down numerous times in which my bank no ? longer issues temporary debit cards so I’m forced to wait the 7 to 10 business days to receive a replacement card in the mail which I use for everything being that personal checks are a thing of the past
Add me to amazon