Washington D.C. Attorney General Carl Racine on Tuesday announced a new anti-trust lawsuit against Amazon, accusing the company of suppressing competition by controlling third-party vendors. The lawsuit, filed in DC Superior Court, alleges that Amazon set prices on its huge online retail platform by preventing third-party sellers from selling their products elsewhere.
Racine argues that this type of format means sellers roll out Amazon’s fairly high prices on their prices, creating a floor of “artificially higher” prices in the online retail market. This practice could be continued by the District of Columbia Antitrust Act. AG’s office argues that the practice allows Amazon to exercise monopoly power in online retail. “Amazon can win at any cost by using its dominant position in the online retail market. Spending on third-party vendors and customers maximizes its profits, damages competition, stifles innovation, and illegally removes the playing field in its favor,” Racine said.
“We have filed this untrustworthy lawsuit to end Amazon’s illegal price controls in the online retail market. We need a free online marketplace that expands the options available to district residents and promotes competition, innovation and choice.” The DC AG case is the latest state-level effort to take a dig at one of the most powerful companies in technology. Both Facebook and Google are facing multi-state lawsuits for anti-government behavior, despite federal lawmakers pushing for major no-confidence reforms.
Citing a report by the U.S. House Antitrust Subcommittee, Racine’s case puts Amazon’s online sales volume at 50% to 70%. Amazon conducted a survey to keep its market share below 40% and argued that the relevant market should be all retail sales online and offline, of which it claims many smaller pieces. The issue in the DC case includes Amazon’s standard agreements and policies for companies selling products on the market.
Amazon removed a clause in 2019 that barred sellers from offering lower prices elsewhere as an obvious condition for selling on Amazon. However, Resin complained in the office suite that the replacement of that provision, known as the Marketplace Fair Pricing Policy, had a similar cooling effect.
