Internet super retailer Amazon is under fire again, this time in the form of an antitrust lawsuit that alleges the company used contract terms to prevent third-party sellers on its platform from offering their products to lower prices on other platforms.
Filed in Washington Superior Court by Washington, DC Attorney General Karl Racine, the lawsuit accuses Amazon of uncompetitive business practices that unfairly raised prices for consumers and suppressed innovation. The attorney general’s office says the provisions of Amazon’s third-party seller contract create “an artificially high floor price in the online retail market.”
When selling items through Amazon, third-party sellers must accept Amazon Services Business Solutions Agreement, a document describing the conditions for participation in the market. In 2019, Amazon removed a clause from the document that imposed price parity for sellers using multiple platforms. The lawsuit claims that Amazon replaced that clause with an almost identical replacement clause that threatened to penalize any third-party seller offering lower prices in competing markets.
Amazon responded to the lawsuit through a spokesperson, explaining, “The DC Attorney General has it all upside down: Salespeople set their own prices for the products they offer in our store. Amazon takes pride in the fact that we offer low prices on the widest selection and, like any store, we reserve the right not to highlight offers to customers whose prices are not competitive. The relief sought by the GA would force Amazon to price customers higher, strangely defeating the fundamental objectives of antitrust law. “
The third-party market accounts for more than half of Amazon’s overall sales. While it will be difficult to mount an antitrust lawsuit against a company as large as Amazon, Racine explained that his office was up to the task and left open the possibility of other states and federal authorities joining in. business in the future.