DC Attorney General Karl Racine has filed an antitrust suit against Amazon, accusing the company of limiting competition by placing restrictions on what third-party sellers can do outside of its marketplace.
In the suit, Racine accused Amazon of abusing its market dominance and unlawfully stifling competition, leading to higher prices and fewer choices for consumers.
“Amazon’s online retail sales platform benefits from, and is protected by, Amazon’s anticompetitive business practices,” the lawsuit stated. “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.”
Less innovation
The suit, which was filed in DC Superior Court, alleges that Amazon holds onto its market dominance by barring third-party sellers from offering products at lower prices on competing platforms. The suit claims that these “most favored nation” agreements have led to higher prices for consumers and less innovation in general.
“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 suit noted that there is a clause that prohibits independent 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.”
Policing big tech
Racine is calling on Amazon to stop engaging in this anticompetitive conduct by doing away with the strict rules that independent sellers must agree to.
“As a direct and proximate cause of Amazon’s exclusionary scheme, District residents have been injured because they have been denied a competitive marketplace for online retail sales and paid higher prices for products than they would have paid absent Amazon’s anticompetitive acts,” the suit said. “District consumers are deprived of choosing from a full, competitive range of online retailers who may have offered lower prices.”
Tech companies have faced a slew of antitrust lawsuits in recent years. At the end of 2020, 48 state attorneys general and the Federal Trade Commission (FTC) sued Facebook for allegedly buying up companies that it may have perceived as competitive threats.
Not long after that suit was filed, Texas Attorney General Ken Paxton launched an antitrust suit against Google for allegedly abusing its market power in the online advertising space.