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Do Amazon’s marketplace policies make shopping on the internet more expensive?
Washington, DC, Attorney General Karl Racine thinks so, which is why he sued Amazon over antitrust allegations yesterday.
Those allegations: Amazon’s restrictive agreements with third-party sellers limit their ability to sell products for less on other e-commerce sites, artificially inflating prices and reducing competition.
- Until 2019, the suit says, Amazon flat-out banned sellers on its marketplace from offering their items for cheaper elsewhere.
- When lawmakers started snooping around, Amazon threw out that rule…then ended up replacing it with a clone, Racine said. If sellers try to list products on other sites for a lower cost, Amazon will allegedly bury them on its site.
In a statement, Amazon said Racine “has it exactly backwards-sellers set their own prices for the products they offer in our store…and like any store we reserve the right not to highlight offers to customers that are not priced competitively.”
Why it’s a big deal
Actually…if we’re being honest…the lawsuit itself isn’t a huge deal. It was filed only in DC, not federal court, and Racine didn’t invite other AGs to the party, as is common in these types of cases. So overall, the lawsuit doesn’t have a lot of teeth.
But it’s important in many ways, too. It’s believed to be the first time that Amazon’s been sued by the US government over antitrust allegations. It also strikes at the core of Amazon’s retail business: its marketplace, which brings in more than half of the company’s total sales.
Bottom line: Amazon now joins Facebook and Google, which have both been hit with antitrust lawsuits. Those cases will be slower moving than you on a Saturday morning, and experts say the tech companies have the advantage due to the current structure of antitrust law.
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