Washington DC accuses Amazon of having unjust pricing policies
Washington DC accuses Amazon of having unjust pricing policies
Washington DC is suing Amazon over allegations that it abuses its position as a retail behemoth.
The lawsuit, filed Tuesday, alleges that Amazon's near-monopoly on online sales in the United States results in higher prices for consumers.
"Amazon's e-commerce platform benefits from and is protected by Amazon's anticompetitive business practices," it stated.
Amazon stated that the lawsuit is "completely incorrect."
The lawsuit, filed by Attorney General Karl Racine of the District of Columbia, accuses Amazon of charging third-party sellers on its site fees of up to 40% of the price of a product and preventing them from charging less on other platforms.
It states: "Rather than enabling consumers to obtain the best products at the lowest prices, Amazon artificially inflates prices across the entire online retail sales market, both for products sold on Amazon's own online retail sales platform and on those of Amazon's competitors."
Amazon Response
"The DC Attorney General has it exactly backwards," an Amazon spokesperson responded. "Sellers set their own prices for the products they offer in our store."
"Amazon takes pride in offering the lowest prices across the largest selection, and like any retailer, we reserve the right not to highlight offers that are not priced competitively."
The lawsuit seeks to enjoin Amazon from engaging in "anti-competitive" behavior and seeks damages and other redress. However, it will apply only to violations of the District of Columbia's rules.
Amazon added that the relief sought would compel it to "offer higher prices to customers, which oddly contradicts antitrust law's core objectives."
Amazon removed a requirement for merchants to sign a "price parity" agreement in 2019 in response to pressure from senior US politicians.
However, Mr Racine stated that it introduced "an almost identical substitute."
The European Commission has already charged the retail behemoth with violating competition rules. It discovered in November that Amazon had manipulated data on third-party sellers on its marketplace in order to boost sales of its own-label goods.
Amazon insisted that its private-label products were beneficial to customers and increased choice, not anti-competitive.
Amazon stated at the time that "no company cares more about small businesses or has done more to support them over the last two decades than Amazon."
The latest legal challenge comes as tech firms face increased scrutiny as a result of the pandemic's impact on sales and memberships.
Facebook and Google, for example, have been chastised by regulators in the United States and the United Kingdom for being "too powerful" in their respective markets.
Conclusion
Meanwhile, Amazon's sales have increased significantly as a result of consumers being forced to stay at home due to coronavirus-related lockdowns. It reported a profit of $8.1 billion (£5.72 billion) in the first three months of the year, three times the amount reported a year earlier.
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