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 complete price, Racine said the policy could make prices for a similar product more expensive on platforms that compete with Amazon.
The valid action is the most recent of a couple of state and federal suits filed against the largest tech companies so that you could 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 precisely backwards – sellers set their own prices for the products they offer in our store. Amazon takes pride in the truth that we offer low prices across the broadest selection, and like any store we reserve the correct not to spotlight offers to customers that aren’t priced competitively,” an Amazon spokesperson said in a remark.
The company’s share price dipped on news of the lawsuit but quickly retrieved.
The lawsuit, which used to be filed in DC Superior Court, put Amazon’s share of the USA 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 remark.
The four big tech companies – Amazon, Facebook, Alphabet’s Google, and Apple – have spent more than a year under antitrust scrutiny.
The United States Justice Branch sued Google late final year alleging violations of antitrust law, as did two groups of states. Facebook used to be sued by the Federal Business Commission and a group of states.
© Thomson Reuters 2021
It’s Google I/O time this week on Orbital, the Gadgets 360 podcast, as we discuss Android 12, Wear OS, and more. Later (starting at 27:29), we hop over to Army of the Deceased, Zack Snyder’s Netflix zombie heist film. Orbital is to be had on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.