Amazon Says D.C. Attorney General's Lawsuit Will Force Company to Raise Prices

A lawsuit filed Tuesday by the District of Columbia against Amazon alleges the e-commerce giant engages in anticompetitive practices in its treatment of its third-party sellers, an accusation Amazon firmly rejected.

D.C. Attorney General Karl Racine argues in the suit that Amazon has fixed online retail prices through contract provisions and policies it applies to third-party sellers. Such agreements prevent sellers that offer products on Amazon from offering their goods at lower prices on any other platform, including their own websites, the suit says.

The company said the antitrust suit, which seeks to force Amazon to end allegedly illegal price agreements, "would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."

Amazon's statement added: "The D.C. attorney general has it exactly backwards — sellers set their own prices for the products they offer in our store.... Like any store we reserve the right not to highlight offers to customers that are not priced competitively."

Eyes on Amazon
Amazon workers and "community allies" march through the lobby of BlackRock in Manhattan to protest against Amazon's working conditions and company policies on May 24. ED JONES/AFP/Getty Images

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Racine said Amazon, the world's biggest online retailer, controls 50 percent to 70 percent of online market sales.

"We filed this antitrust lawsuit to put an end to Amazon's illegal control of prices across the online retail market," Racine said in a conference call with reporters. "We need a fair online marketplace that expands options available to [District of Columbia] residents and promotes competition, innovation and choice."

Founded by Jeff Bezos, the world's richest individual, Amazon runs an e-commerce empire with ventures in cloud computing, personal "smart" tech and beyond.

Its third-party marketplace, with independent merchants listing millions of their products on the site, is a huge part of Amazon's business. It has about 2 million sellers on its marketplace, and the company has said that more than half the goods sold on Amazon.com come from third-party sellers.

Amazon also makes money by charging third-party sellers fees, bringing in $24 billion in revenue in the first three months of this year, up 64 percent from the same period in 2020.

Like its Big Tech counterparts Facebook, Google and Apple, Amazon faces multiple legal and political offensives from Congress, federal and state regulators and European watchdogs.

A congressional investigation threw a spotlight on complaints by merchants that sell products on Amazon's platform about the kinds of practices that the District of Columbia suit focuses on. Officials in California and Washington state also have been reviewing the practices.

European Union regulators filed antitrust charges in November accusing Amazon of using its access to data from sellers that use its platform to gain an unfair advantage over them.

Bezos is stepping down this summer as CEO, to be replaced by Andy Jassy, who runs the cloud-computing business. Bezos will become executive chairman.

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Amazon tractor trailers line up outside the Amazon Fulfillment Center in the Staten Island borough of New York on May 25. Mark Lennihan/AP Photo