The District of Columbia filed an antitrust lawsuit against Amazon on Tuesday, claiming the internet goliath is illegally abusing its power to manipulate online retail prices and screw over merchants.
In his court filing, Washington DC’s Attorney General Karl Racine slammed [PDF] Amazon for insisting that businesses that set up shop in its marketplace cannot peddle their products for a lower price on their own websites nor any other retail site like eBay or Walmart. Under Amazon’s Fair Pricing Policy, vendors can be fined or banned from selling their goods on the platform if they break these rules, and vendors are also required to pay Amazon fees and extra charges that can rack up to 40 per cent of the price tag of listed products.
“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.
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That aforementioned policy, Racine argued, means vendors are more likely to set their prices high on Amazon to make a living, and cannot offer their goods cheaper elsewhere. All in all, businesses and buyers lose, though Amazon wins, according to the lawsuit.
It’s not the first time Amazon has come under fire for its anti-competitive practices. Prior to its Fair Pricing Policy, there was another rule known as the price parity provision that ended in 2019 after the US federal government started investigating. The Fair Pricing Policy was then ushered in, though Racine said it is an “effectively-identical substitute” to the previous price parity provision.
In an attempt to level the playing field for online retail stores, the District of Columbia has asked its Superior Court to strip the company of its anti-competitive policies, order it to pay the maximum fines, and repay damages to shoppers under the state’s antitrust law.
Amazon was not immediately available for comment. ®