Amazon’s legal team is facing an increased challenged after the Attorney General of the District of Columbia (Washington DC) expanded its action against the firm.
Attorney General Karl Racine’s office said on Monday that it has broadened its antitrust lawsuit against Amazon to challenge the online retailer’s agreements with wholesalers as well as third-party sellers.
It was back in May this year when Attorney General Karl Racine announced he was suing Amazon on antitrust grounds, and alleged that the company’s practices had “raised prices for consumers and stifled innovation and choice across the entire online retail market.”
That lawsuit alleged that Amazon illegally maintained monopoly power through pricing contracts with third-party sellers.
This, the lawsuit alleged, meant Amazon’s requirements banned third-party sellers from selling elsewhere for less than on Amazon.
But now Reuters has reported that the new complaint includes allegations that Amazon has agreements with wholesalers that guarantee it a minimum profit.
As a result, the complaint alleges, if Amazon lowers a price to compete with another online seller, the wholesaler must pay Amazon the difference between the price it sells at, and the agreed minimum.
These payments are a disincentive for wholesalers to lower prices to compete, the complaint reportedly said.
Amazon, which filed a motion to dismiss the lawsuit on Friday, said that the Washington DC lawsuit had it wrong.
“Sellers set their own prices for the products they offer in our store,” Amazon reportedly said in a statement.
“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,” it added.
Amazon is also facing similar action on this side of the pond.
In May this year tougher new laws in Germany were used to begin an antitrust investigation of Amazon over alleged market domination.
And in November 2020, the European Commission hit Amazon with its “Statement of Objections”, which it said concerns “the use of non-public independent seller data”.
It alleged that Amazon had used data on third-party sellers that use its marketplace to boost sales of its own-label goods.