Amazon is being sued by Washington DC over allegations it has abused his position and power as a retail giant. Lawsuit, filed on Tuesday, claims that Amazons control of US online retail sales results in higher prices for consumers. Amazon currently control up to 70% of online sales in the US.
“Amazons online retail platforms benefit from and is protected by Amazons anti-competitive business practices” claims the lawsuit.
The lawsuit was filed by Karl Racine, Attorney General for the District of Columbia. The lawsuit accuses Amazon of charging third-party sellers on its site fees of up to 40% of a product price, as well as stopping them for charging less on other platforms.
He said “Far from enabling consumers to obtain the best products at the lowest prices, Amazon instead causes prices across the entire online retail sales market to be artificially inflated, both for products sold on Amazon is online retail sales platform and on its competitors online retail sales platform.”
A spokesperson for amazon said in response, “The DC attorney general as 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 the office to customers that are not priced competitively.”
The lawsuit seeks to stop Amazon using anti-competitive practices and calls for damages and remedial actions to happen. This lawsuit however, is limited to the District of Columbia.
2019 Amazon scrapped a requirement for merchants to sign a price parity agreement that stop them from something at low prices in other places. Mr Racine has said that it has introduced and effectively identical substitute to the policy.
The Internet giants has already been charged with abusing competition rules by the European commission. In November, I found Amazon and used data on third-party sellers that use its marketplace to boost sales of its own label goods. Amazon insisted that the practice was not being anti-competitive and that it was simply offering cheaper alternatives to goods sold by third-party sellers to the customers of Amazon.
This news comes off the back of a bumper year of trade for Amazon. Amazon have seen sales saw as consumers are forced to stay at home due to coronavirus related lockdowns around the world. In the first three months of the year it has reported profits of $8.1 billion – 3 times the amount in the same period last year.