Washington DC has sued Amazon for violating regional competition laws by arresting unscrupulous retailers to promote bans.
Karl Racine, attorney general of the District of Columbia, criticized the ecommerce giant for charging third-party traders a 40% fine for selling through their website, and then told them not to pay less to other platforms.
The company already case to the EU on its European business practices that use its platform to sell goods, but this is the first time that similar charges have been filed in the US.
This comes at a time when major technology companies are facing anti-competitive lawsuits. Racine is one of many lawyers who are also pursuing lawsuits against Facebook and Google.
The new law, which was unveiled on Tuesday, states that Amazon’s “ban on contracts” has raised consumer prices.
“Amazon is successful because it controls the prices in the online retail market, placing itself at a higher level than anyone else,” he said. “As a result, Amazon is expanding its market share and unwittingly reducing the number of other platforms competing in the market.”
Amazon says in 2019 it will no longer bar third-party retailers from selling their cheap products elsewhere, following opposition from senior Democrats such as Elizabeth Warren, a Massachusetts senator. Racine’s lawsuit accuses the company of continuing to do so, however, through its “fair policy”, which allows it to ban traders who offer lower prices elsewhere.
“The DC attorney general has a real backlash – retailers base their prices on the products they offer in our store,” the company said. “Amazon is proud to offer the lowest prices on the largest options, and like any store we have the right not to offer what customers offer at the lowest price.”
Racine’s indictment is merely a violation of the District of Columbia law. But it will look like a test if other countries and legal entities can make their own lawsuits against Amazon.
DC’s lawsuit against Amazon promotes the arguments of Democrats, who wrote it in the report Last year Amazon was guilty of using its power to harass third-party retailers and using their knowledge to help fix their competitors.
Currently the President of the National Association of Attorneys-General, Racine is said to be under the care of US President Joe Biden to head the Federal Trade Commission.
The FTC is responsible for investigating how Amazon’s competitors formed an agreement that took place two years ago with the Department of Justice, although the Commission has not said whether it is trying to oppose the company. Biden has appointed Lina Khan, one of the company’s most vocal critics, as Commissioner.
Asked about reports that he could be elected to head the FTC, Racine said: “The FTC issue is something the President has in mind.”