DC Attorney General Launches Antitrust Suit Against Amazon
On Tuesday, May 25, 2021, DC (District of Columbia) Attorney General Karl Racine launches antitrust suit against Amazon.
The suit accuses the company of stifling competition through Market place pricing requirements involving its e-Commerce platform.
Amazon, an e-commerce giant, is accused of suppressing competition by placing strict conditions on what third-party sellers (TPS) can do outside of the company’s platform.
“Amazon’s policies have prevented competing platforms, including sellers’ own websites, from competing on price and gaining market share,” Racine said in a press call. “The loss of competition results in less innovation.”
The lawsuit styled District of Columbia v. Amazon.com, Inc., is filed for violations of the District of Columbia Antitrust Act, D.C. Code §§ 28-4501, et seq. The suit alleges that Amazon controls 50-70% of all online retail sales in the U.S., and Amazon holds an even larger market share of multi-seller online retail platforms, such as Walmart.com and eBay.
Amazon has in place certain agreements with third-party sellers (TPS) as part of its protocol of engagement with TPS. In particular, the lawsuit takes aim at a clause in Amazon’s required agreements for third-party sellers (TPS) that “explicitly prohibited [third-party sellers] from offering their products on a competing online retail sales platform, including the TPS’s own website, at a lower price or on better terms than the TPS offered the products on Amazon.”
Racine wants to curb additional anti-competitive conduct and is seeking structural remedies, e.g., Amazon ending its price agreements and recovering damages.
Amazon retorted by extolling the independence of sellers stating: “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 to The Verge Tuesday. “The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The new DC lawsuit is the latest in a string of major antitrust cases against tech companies. Last December, 48 State Attorneys general and the Federal Trade Commission (FTC) sued Facebook for allegedly acquiring companies that Facebook perceived as competitive threats to its business. That same month, Texas Attorney General Ken Paxton led an antitrust lawsuit against Google for allegedly abusing its market dominance in the online advertising market.