Ian Patrick, FISM News
One day before news of Amazon’s purchase of MGM studios, the attorney general for the District of Columbia announced that he filed an antitrust lawsuit against the tech giant. Attorney General Karl A. Racine went to Twitter to say that the lawsuit is on the grounds of “illegally abusing and maintaining its monopoly power by controlling prices across the online retail market and violating DC law.”
For years, Amazon has controlled online retail prices through its restrictive contract provisions & policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online – including their own websites – for a lower price than on Amazon.
— AG Karl A. Racine (@AGKarlRacine) May 25, 2021
Racine blasted Amazon saying that the company “maximizes its profits at the expense of 3rd party sellers & consumers forced to pay artificially high prices, while harming competition & innovation & illegally tilting the playing field.” He further stated that Amazon charges high fees on product prices to third-party sellers, sometimes as much as 40%, and that price is reflected on other competing websites as well.
The AG mentioned that “Amazon claimed it removed its price parity restrictions in 2019,” which does not allow a third party selling their product on Amazon to offer it for less on other sites. Racine alleges, however, that Amazon put in its place a different provision which could remove or sanction these sellers if they offer their product for less elsewhere.
We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
CNBC reports that an Amazon spokesperson responded to the lawsuit, saying that AG Racine “has it exactly backwards,” and the relief sought in the lawsuit “would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”