Washington DC Sues Amazon Over Artificial Inflation of Prices

On Tuesday, Washington DC filed a lawsuit against the e-commerce giant Amazon because of claims related to unfair pricing. This was filed by District of Columbia Attorney General Karl Racine. It accuses Amazon of charging fees up to 40% of a product’s price on third-party sellers and restricts them from posting lower prices on other platforms.

“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’s online retail sales platform and on its competitors’ online retail sales platforms,” the lawsuit explained.

“The DC Attorney General has it exactly backwards – sellers set their own prices for the products they offer in our store,” said an Amazon spokesperson in response. “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 offers to customers that are not priced competitively.”

The lawsuit is aimed at stopping Amazon from enabling practices that are deemed “anti-competitive” while also calling for damages and remedies. However, it will only apply to violations in the District of Columbia alone.

Previously, the European Commission had also charged Amazon with abusing competition rules. It was found that the e-commerce giant had used data on third-party sellers that use its platform to substantially increase sales of Amazon-labelled goods.

At the time, Amazon maintained that they were far from being anti-competitive. Rather, its own-label products were for the good of its customers and offered more choices.

Big tech firms have faced elevated scrutiny as sales or memberships skyrocketed during the pandemic. This has prompted a flurry of legal battles. Regulators have likewise deemed Facebook and Google as being “too powerful” in their markets.

Source: BBC