Daily Management Review

Washington DC Accuses Amazon Of Unfair Pricing Policies


Washington DC Accuses Amazon Of Unfair Pricing Policies
The world’s largest retailer Amazon is facing a court case filed by Washington DC over charges that the company regularly misuses its powerful market position in the retailing industry.
Consumers in the United States have to face higher prices because of the control of amazon on about 70 per cent of the online sales in the country, alleged the lawsuit that was filed earlier this week.  
"Amazon's online retail sales platform benefits from, and is protected by, Amazon's anticompetitive business practices," it said.
The lawsuit "has it exactly backwards", Amazon said.
Amazon charges as much as 40 per cent of a product's price as fees from third party sellers its platform while also preventing the sellers from charging less for their products on other platforms, says the lawsuit that was filed by Karl Racine, Attorney General for the District of Columbia.
"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 says.
"The DC Attorney General has it exactly backwards - sellers set their own prices for the products they offer in our store. 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," an Amazon spokesperson said in response to the news of the lawsuit.
The lawsuit has sought court intervention to prevent amazon from utilizing "anti-competitive" practices while also asking for damages and some remedies.
But it will only apply to violations of the rules in the District of Columbia itself.
The relief sought would force it "to feature higher prices to customers, oddly going against core objectives of antitrust law", Amazon added.
The practice for merchants for signing a "price parity" agreement was stopped by Amazon in 2019. Under that previous arrangement sellers and merchants were prevented from selling their products at lower prices. The change was implemented by the e-retailer because of pressure from senior US politicians.
The company however it introduced "an effectively-identical substitute", Racine has said.
The European Commission has already accused the e-retailing giant of abusing competition rules in the bloc. Amazon had boosted the sale of its own products by using data on third-party sellers that use its marketplace, the Commission found in November last year.
However Amazon has been defending its business practices and has argued that its business policies are not at all anti-competitive but private-label products were good for customers and offered more choice.
"No company cares more about small businesses or has done more to support them over the past two decades than Amazon," it said at the time.