D.C. AG targets Amazon in new antitrust suit over third-party seller pricing policies

Incoming Amazon CEO Andy Jassy will probably be grappling with a rising variety of antitrust challenges. (GeekWire File Photograph / Todd Bishop)

A brand new lawsuit from the Washington, D.C., legal professional common alleges that Amazon illegally manipulates the e-commerce market to its personal benefit by penalizing third-party sellers that provide merchandise at decrease costs on different platforms.

Amazon rapidly shot again, saying that Legal professional Common Karl Racine “has it precisely backwards,” and that his treatments “would pressure Amazon to function increased costs to clients, oddly going towards core goals of antitrust regulation.”

The go well with, filed Tuesday morning, is a part of a broader transfer by legislators and regulators to scrutinize and take motion towards Amazon’s enterprise practices as a test on the corporate’s market energy. Antitrust challenges are shaping up as one of many defining points for incoming CEO Andy Jassy as founder Jeff Bezos shifts to a brand new position as government chairman later this yr.

Racine’s go well with places Amazon’s share of on-line gross sales at 50% to 70%, citing a U.S. Home antitrust subcommittee report final yr. Amazon has cited research placing its market share under 40%, whereas arguing that the related market must be all retail gross sales, on-line and offline, of which it claims a a lot smaller slice.

At situation within the D.C. case are Amazon’s customary contracts and insurance policies for firms that promote merchandise on its market. Amazon in 2019 eliminated a clause that prevented sellers from providing decrease costs elsewhere as an specific situation of promoting on Amazon.

Nevertheless, Racine’s workplace alleges within the go well with that the substitute for that provision, referred to as the Marketplace Fair Pricing Policy, has an analogous chilling impact.

The corporate says in that coverage, “If we see pricing practices on a market supply that harms buyer belief, Amazon can take away the Purchase Field, take away the supply, droop the ship possibility, or, in severe or repeated instances, suspending or terminating promoting privileges.”

The result’s to “impose an artificially excessive value flooring throughout the web retail market and permit Amazon to construct and preserve monopoly energy,” Racine’s workplace stated in a statement.

Amazon, in response, factors out that sellers set their very own costs. Right here is the corporate’s assertion in full.

“The DC Legal professional Common has it precisely backwards – sellers set their very own costs for the merchandise they provide in our retailer. Amazon takes pleasure in the truth that we provide low costs throughout the broadest choice, and like all retailer we reserve the proper to not spotlight affords to clients that aren’t priced competitively.  The aid the AG seeks would pressure Amazon to function increased costs to clients, oddly going towards core goals of antitrust regulation.”

The go well with, filed in Washington, D.C., Superior Courtroom, is available here.

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