Internet super-retailer Amazon is under fire once again, this time in the form of an antitrust lawsuit that alleges the company used contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms.
Filed in D.C. Superior Court by Washington, D.C. Attorney General Karl Racine, the lawsuit charges Amazon with non-competitive business practices that have unfairly raised prices for consumers and suppressed innovation. The attorney general’s office asserts that Amazon’s third-party seller contract provisions create “an artificially high price floor across the online retail marketplace.”
By selling items through Amazon, third-party sellers must agree to the Amazon Services Business Solutions Agreement, a document outlining the terms of marketplace participation. In 2019, Amazon removed a clause in the document that mandated pricing parity for sellers using multiple platforms. The lawsuit claims Amazon replaced this clause with a nearly identical replacement that threatened sanctions on any third-party sellers found to be offering lower prices on competing marketplaces.
Amazon responded to the suit through a spokesman, explaining, “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. The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”
The third-party marketplace accounts for more than half of Amazon’s overall sales. While mounting an antitrust suit against a firm as large as Amazon will be difficult, Racine explained that his office is up to the task and left open the possibility that other states and federal enforcers could join the case in the future.