Washington D.C.’s attorney general filed a lawsuit against Amazon on Tuesday, accusing the retail giant of abusing its monopoly power and inflating prices, The New York Times reports.
The lawsuit, the first antitrust claim against Amazon, accuses the company of effectively barring vendors from charging lower prices for the same products on other websites. As a result, prices are inflated not just on Amazon but across the web.
“Amazon has used its dominant position in the online retail market to win at all costs,” said DC Attorney General Karl Racine. “It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation and illegally tilting the playing field in its favor.”
Amazon spokeswoman Jodi Seth said that Racine “has it exactly backwards — sellers set their own prices for the products they offer in our store.” She added that the company reserves the right “not to highlight offers to customers that are not priced competitively.”
Amazon scrutiny ramps up:
Along with the lawsuit, the Federal Trade Commission has been investigating whether Amazon has violated antitrust laws.
California, New York, and Washington have launched their own investigations.
The company also caught the attention of the House Judiciary Committee, which is considering legislation that would restrict the retailer.
Multiple states last year filed antitrust lawsuits against Facebook and Google, though no states have joined Racine’s lawsuit.
Racine’s lawsuit was filed in DC court rather than federal court, meaning that any judgment would be limited to Washington D.C.
Suit targets Amazon’s price controls:
The lawsuit is focused on Amazon’s “Fair Pricing Policy,” which the complaint says allows the company to “impose sanctions” on vendors whose products are sold for less elsewhere. Sometimes the company removes “Buy Now” and “Add to Cart” buttons from a product page, which reduces sales. As a result, some vendors are forced to reduce prices elsewhere on the web.
“Walmart routinely fields requests from merchants to raise prices on Walmart’s online retail sales platform because the merchants worry that a lower price on Walmart will jeopardize their status on Amazon,” the complaint said.