Amazon sued by DC’s AG over alleged antitrust practices

The attorney general for Washington, DC is accusing Amazon of engaging in anticompetitive practices that have raised prices for US consumers.

Karl Racine, the attorney general for the District of Columbia in the United States, said Amazon’s policies governing third-party sellers prohibit them from offering products at lower prices on rival platforms, which has led to artificially high prices for consumers and let the company build monopoly power [File: Bloomberg]
Karl Racine, the attorney general for the District of Columbia in the United States, said Amazon’s policies governing third-party sellers prohibit them from offering products at lower prices on rival platforms, which has led to artificially high prices for consumers and let the company build monopoly power [File: Bloomberg]

Amazon.com Inc. was sued by the attorney general for Washington, D.C., who accused the online retail giant of engaging in anticompetitive practices that have raised prices for consumers.

Amazon’s policies governing third-party sellers prohibit them from offering products at lower prices on rival platforms, which has led to artificially high prices for consumers and let the company build monopoly power, Karl Racine said.

“Amazon is increasing its dominant stronghold on the market and illegally reducing the ability of other platforms to compete for market share,” Racine said Tuesday on a conference call with reporters announcing the case.

Amazon shares fell 0.8% to a session low on the news and were down 0.7% at $3,223.43 at 11:59 a.m. The company didn’t immediately respond to a request for comment.

Amazon merchants and their consultants in 2019 told Bloomberg that Amazon’s practices forced them to raise prices on other sites such as Walmart Inc. If Amazon detected lower prices on other sites, it would bury their products in Amazon search results, where they got most of their sales. Some of the merchants were eager to grow their sales on other sites, but Amazon’s policies prevented them from offering lower prices elsewhere to lure shoppers away.

The lawsuit is the sixth antitrust case against a major U.S. tech company filed in the last year by state and federal officials. The U.S. Justice Department and a group of states sued Alphabet Inc.’s Google last year, accusing the company of abusing its dominance in internet search. That case was followed by two separate complaints against Google filed by other states over search and digital advertising. The Federal Trade Commission and a nationwide coalition of states sued Facebook Inc. in December separate complaints that seek to break up the company.

(Updates with Racine comment in third paragraph)

Source: Bloomberg

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