The attorney general for the nation’s capital has filed a lawsuit accusing Amazon.com of creating a monopoly that charges Washington, D.C., residents inflated prices for items from books to televisions purchased from the world’s largest online retailer.
The complaint, filed in D.C. Superior Court on Tuesday, says the Seattle-based company forces third-party sellers – independent merchants who rely on its platform for revenue – to sign an agreement promising they won’t offer their merchandise for lower prices elsewhere.
“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,” Attorney General Karl Racine argued in the complaint.
The lawsuit comes amid growing concern that Amazon and Silicon Valley giants from Facebook to Google have garnered monopoly power that generates outsized returns for their shareholders at the expense of the American public.
Sen. Elizabeth Warren, the Massachusetts Democrat and former presidential candidate, has argued in favor of breaking up Amazon, founded by Jeff Bezos, the world’s richest man, as well as social media giant Facebook. The Trump-era Justice Department, meanwhile, opened a broad antitrust review into concerns about the practices of social media, search and some online retail companies.
Amazon and others have pushed back hard against such complaints, arguing that they face stiff competition, a position the online retailer underscored on Tuesday.
“The D.C. Attorney General has it exactly backward – sellers set their own prices for the products they offer in our store,” a company spokesperson told Lawdragon. “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.”
The relief that the District is seeking – which includes barring Amazon’s prohibition on third-party vendors offering lower prices elsewhere – would force the company to “feature higher prices to customers, oddly going against core objectives of antitrust law,” the company said.
Racine’s office, however, characterized the retailer’s practices differently, noting that the current policy replaces one rescinded amid broad criticism in 2019. Both resulted, effectively, in a “most-favored nation” status for the platform, the suit claims.
The agreement basically forces sellers to incorporate the high fees charged by Amazon – as much as 40 percent of total product price – into their prices on every sales platform they use, the attorney general said.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” Racine said in a statement. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market.”