By Leonard A. Robinson
DC Attorney General Karl Racine filed a lawsuit on May 25 alleging Amazon’s online retail division violates current antitrust laws and hikes prices for consumers.
The lawsuit focuses on the rules to which merchants must agree to sell on the platform. Merchants are prohibited by Amazon from selling products at better terms or lower prices on any other platform, including their website, leading to higher prices across the entire market.
Racine said Amazon has been “illegally abusing and maintaining its monopoly power by controlling prices across the online retail market.”
Amazon officials see the issue differently.
“The DC Attorney General has it exactly backwards – sellers set their own prices for the products they offer in our store,” said an Amazon spokesperson. “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 relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”
Filed in DC Superior Court, the ruling is unlikely to impact the company’s operations outside of the District of Columbia.
This is the first federal antitrust lawsuit against Amazon, and Racine believes that other states may take similar action.
“It is not unusual after a suit for other attorneys general to express an interest in the lawsuit and join or to file their own,” Racine said to CNN Business.
Numerous states have filed antitrust lawsuits against Google and Facebook over the past year, raising the profile of the fight for more stringent antitrust law. Federal Trade Commission nominee Lina Khan will be a welcome ally going forward for the Biden administration, who are supportive of tighter antitrust enforcements against large tech companies.
Amazon’s share of the online retail market is estimated to be around 40%.
