- The Washington Times - Tuesday, May 25, 2021

The District’s attorney general filed an antitrust lawsuit Tuesday against Amazon alleging the tech giant has been stifling competition for years by illegally fixing online market prices.

Attorney General Karl A. Racine told reporters during a conference call that Amazon bowed to pressure from Congress in 2019 and removed a parity policy that barred third-party vendors from selling their products on other sites at a lower price.

The company, however, “quietly” replaced the provision with an “effectively identical substitute,” he said. The new “fair pricing” rules reportedly require third-party vendors to agree to sanctions or removal from Amazon if they sell their products for a lower price or “better terms” on a different online platform.

The agreements, he said, force third-party vendors to incorporate Amazon fees — as much as 40% of the product price — into the price charged on Amazon and competing websites.

“As a result, Amazon is increasing its dominant stronghold on the market and illegally reducing the ability of other life-forms to compete for market share,” Mr. Racine said. “On the other hand, consumers and third-party sellers lose because they are forced to pay artificially high prices due to Amazon‘s monopoly power.”

Amazon is estimated to hold 50% to 70% of the market share of online retail sales, while the next two biggest competitors — Walmart and eBay — hold about 5%, he said.

Mr. Racine wants a judge to find that Amazon violated the District’s antitrust laws, enjoin the retailer from further anticompetitive conduct, and award damages and attorney’s fees. The 30-page lawsuit was filed on behalf of the city in D.C. Superior Court.

An Amazon spokesperson, however, told The Washington Times on Tuesday that Mr. Racine “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 spokesperson said. “The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”

The District’s complaint comes one week after Germany’s Federal Cartel Office, an antitrust watchdog, launched an investigation into whether Amazon is exploiting its online marketplace power. 

Meanwhile, American consumer advocate groups like Public Citizen and American Economic Liberties Project have been urging President Biden for months to crack down on Big Tech companies like Amazon, Google, Facebook and Apple.

In October, Congress released an investigation that found “significant evidence that these firms wield their dominance in ways that erode entrepreneurship, degrade Americans’ privacy online, and undermine the vibrancy of the free and diverse press.”

As the federal government mulls its next move, Mr. Racine and other state attorneys general have taken matters into their own hands. In addition to Tuesday’s lawsuit, Mr. Racine joined coalitions of attorneys general in December in filing antitrust suits against Facebook and Google.

• Emily Zantow can be reached at ezantow@washingtontimes.com.

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