On Tuesday, DC Attorney General Karl Racine sued Amazon on antitrust grounds, accusing the e-commerce giant of suppressing competition by placing strict conditions on what third-party sellers can do outside of the company’s platform.
“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.”
Filed in DC Superior Court, the lawsuit alleges that Amazon unlawfully maintains its monopoly power by preventing independent sellers from offering products at lower prices on other platforms. It also claims that these “most favored nation” agreements harm consumers by inflating prices and stifling competition and innovation in the online retail market.
In particular, the lawsuit takes aim at a clause in Amazon’s required agreements for third-party sellers that “explicitly prohibited [third-party 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.”
Racine is seeking structural remedies, like Amazon ending its price agreements and recovering damages to curb additional anti-competitive conduct.
“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,” an Amazon spokesperson said in a statement to The Verge Tuesday. “The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”
Amazon’s Marketplace platform offers a way for independent sellers to list products and make sales on the site, leading to an often chaotic mix of independent shops and offerings. Amazon’s pricing agreements with those sellers have long been controversial, and it quietly withdrew one of the clauses spelling out the requirement in 2019. But the new lawsuit argues the same provisions were later incorporated into the company’s Fair Pricing Policy, which deals primarily with deceptive listings or otherwise predatory pricing behaviors.
The new DC lawsuit is the latest in a string of major antitrust cases against tech companies. Last December, 48 state attorneys general and the Federal Trade Commission sued Facebook for allegedly acquiring companies that it perceived as competitive threats to its business. That same month, Texas Attorney General Ken Paxton led an antitrust lawsuit against Google for allegedly abusing its market dominance in the online advertising market.
Updated 5/25/2021 at 6:35PM ET: Added a statement from Amazon.