Amazon has bagged a new antitrust suit courtesy of Washington, DC Attorney General Karl Racine. Racine announced the suit on Tuesday, accusing the e-commerce giant of suffocating competition by exercising control over third-party sellers.
According to the lawsuit filed in DC Superior Court, Amazon's online retail platform has a fixed price. This functionality prevents third-party sellers from selling their products for less everywhere. This type of functionality creates an artificially high price floor across the online retail market, Racine argues. This is because sellers will, in turn, factor Amazon's high fees into their pricing.
“Amazon has used its dominant position in the online retail market to win at all costs. 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,” Karl Racine D.C attorney general.
Amazon's practice might conflict with the District of Columbia's Antitrust Act. The AG's office argues that the approach allows Amazon to exercise monopoly power in online retail.
“We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.” Karl Racine
The DC AG lawsuit joins the trend of state-level effort to cut down the dominance of tech's most influential companies. Speaking of powerful companies, Facebook and Google are currently facing multi-state lawsuits for alleged anticompetitive behaviour, with federal lawmakers eyeing a major antitrust reform.
USA in focus
GDP: $21.433 trillion compared to China's $14.28 trillion in 2019
Population: 328,239,523 compared to China's 1.398 billion in 2019
GDP per capita: $11,433 compared to China's $10,216 in 2019