The antitrust lawsuit, the first to target Amazon in the United States, opens a new front in the campaign against big American tech companies and is the sixth such case filed last year by state and federal authorities. Yet even with the prospect of more actions underway against the industry in general and Amazon in particular, the retailer’s shares recovered from a news drop and rose on the same day.
Attorney General Karl Racine filed the Amazon case for the district on his own, rather than teaming up with states, which is standard practice for attorneys general. He said he did not know if the states would accede and that he had not coordinated with the Federal Trade Commission. Additionally, investors understand that monopoly cases typically last for years and can be difficult to win. The Justice Department’s lawsuit against Google is not scheduled until 2023.
In his complaint, Racine said Amazon’s policies governing third-party sellers prohibited them from offering lower-priced products on competing platforms, which led to artificially high prices for consumers and allowed up to the company to create a monopoly.
“Amazon is increasing its dominant stronghold in the market and illegally reducing the ability of other platforms to compete for market share,” said Racine, who was launched as a potential candidate for the FTC president.
The lawsuit focuses on most-favored-nation agreements, which prevent third-party merchants from selling for less elsewhere, including their own websites, Racine said. The agreements mean that the fees that Amazon charges sellers are built into the prices that sellers charge on Amazon and competing online platforms, Racine said.
“The DC attorney general has it exactly the other way around – salespeople set their own prices for the products they offer in our store,” a company spokesperson said in an email. “Amazon takes pride in the fact that we offer low prices on the widest selection, and like any store, we reserve the right not to promote offers to customers whose prices are not competitive.”
Amazon said the outcome Racine sought in this case would force the company to post higher prices, “strangely defeating the fundamental objectives of antitrust law.” “
Amazon merchants and their consultants in 2019 told Bloomberg that Amazon’s practices forced them to raise prices on other sites such as Walmart Inc. If Amazon detected lower prices on other sites, it would bury their prices. products in Amazon search results, where they got most of their sales. Some merchants were eager to increase sales on other sites, but Amazon’s policies prevented them from offering lower prices elsewhere to attract buyers.
The antitrust lawsuit follows a wave of investigations and lawsuits targeting America’s biggest tech companies. Facebook Inc. and Alphabet Inc.’s Google were sued by state and federal officials last year in monopoly cases, while a House investigation accused the two companies, as well as ‘Amazon and Apple Inc., to abuse their dominant position in digital markets.
Other cases could be in progress. The attorneys general of California and New York and the Federal Trade Commission have investigated Amazon, Bloomberg reported, while the Department of Justice has investigated Apple.