Wed. Aug 10th, 2022

District of Columbia Attorney General Karl Racine expanded the scope of his antitrust complaint against Amazon, bringing its relationship with wholesalers under the microscope, CNBC reported Monday (September 13).

In May, Racine sued Amazon, saying the company has monopolistic powers because of its pricing contracts with third-party sellers selling on Amazon under their own brand. Now, Racine said Amazon is involved in anti-competitive practices with wholesalers known as first-party sellers, according to the report.

In its new application, Racine said that Amazon’s “Minimum Margin Agreement” with first-party sellers has the “practical effect” of encouraging wholesalers to raise their prices for online marketplaces outside Amazon, because these deals force the wholesaler to guarantee Amazon a minimum profit. the report.

“These agreements reduce the ability of other online marketplaces to compete with Amazon by offering lower prices to consumers,” the complaint was reported by CNBC. Practice “results in reduced competition between online marketplaces and higher prices for consumers.”

Racine issued a statement saying Amazon has used its dominant position in e-commerce to “rig the system”, meaning consumers are paying higher prices and there is less competition between online marketplaces, according to the report.

Racine’s office uncovered Amazon’s “anti-competitive” agreements with first-party sellers during its investigation into its relationship with third-party sellers, the report said.

Amazon spokesman Jack Evans told CNBC that Amazon is behind its earlier statement about Racine’s first lawsuit against the company.

“The DC Attorney General has it exactly backwards – sellers set their own prices for the products they offer in our store,” Evans said in the statement sent to CNBC. “Amazon takes pride in offering low prices across the widest range, and like any store, we reserve the right not to highlight offers to customers that are not competitive prices. The relief AG wants would force Amazon to offer higher prices to customers, which is strangely contrary to the core objectives of the Antitrust Act. ”

Last month, Amazon debuted a site that aims to get sellers on its side in the fight against the proposed antitrust law. The site allows salespeople to sign up for information from the company’s public policy team about legislation aimed at limiting the power of Amazon and other Big Tech companies.

Read more: New Amazon site breaks antitrust laws



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