Skip to main content

Amazon accused of engaging in anti-competitive agreements with wholesalers

The lawsuit alleges that Amazon is not favorable to third-party resellers.

Update, Sept 13 (10:45 a.m. ET): DC AG files amended lawsuit targeting Amazon's 'Minimum Margin Agreement' with first-party sellers

What you need to know

  • DC's Attorney General filed a lawsuit against Amazon alleging that the company fixes online retail prices.
  • DC AG says that the practices aren't helping third-party resellers.
  • Amazon has been under anti-competitive scrutiny for over a year now.

DC's Attorney General has filed a lawsuit against Amazon to end anti-competitive practices that have raised prices for consumers and stifled innovation and choice across the platform.

Karl Racine alleges in a press release that Amazon's fixes online retail prices through contract provisions and policies to third-party sellers. The press release said that these provinces and policies are considered the "most favored nation," which prevents third-party sellers from offering the same products at lower prices on other platforms, including their own.

By putting this policy into practice, third-party sellers have to incorporate high fees, "as much as 40% of the total product price," into the price charged to customers on Amazon but also on other platforms that third-party sellers sell on.

"As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia's Antitrust Act," the release said.

Racine said in the release that Amazon had used its dominant market power to win and not allow third-party sellers to succeed.

"It maximizes its profits at the expense of third-party sellers and consumers while harming competition, stifling innovation, and illegally tilting the playing field in its favor," he said. "We filed this antitrust lawsuit to put an end to Amazon's illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice."

Amazon currently controls 50 - 70% of online market sales. Many of those sales happen during the company's Prime Day Event, a two-day event where you can find some of the best Prime Day deals. The company, along with Google, Facebook, and Apple have all been under antitrust scrutiny for more than a year.

The U.S. Justice Department sued Google in late 2020, alleging violations of antitrust law. Facebook was also sued by the Federal Trade Commission and a group of states.

Update, Sept 13 (10:45 a.m. ET) ― Amended lawsuit claims Amazon abuses its dominant position to stifle competition

D.C. Attorney General Karl A. Racine has filed an amended lawsuit against Amazon, alleging that the retail giant's anti-competitive agreements with first-party sellers "also harm consumers by causing prices on online marketplaces to be higher." The amended complaint also accuses Amazon of "stifling competition and innovation among online marketplaces" by misusing its dominant position.

Attorney General Racine said in a statement:

As we further investigated Amazon's anti-competitive practices that harm consumers and further entrench Amazon's monopoly, we learned it was also engaging in anti-competitive agreements with first party sellers, or wholesalers – in addition to third-party sellers. I filed this antitrust lawsuit to stand up for consumers, hold Amazon accountable for its anti-competitive practices, and protect competition. We're continuing to do just that with this amended complaint that adds more of Amazon's misconduct.

As per the new sections, Amazon's agreements with first-party sellers guarantees the company a certain minimum profit when it sells the products purchased from them on its online marketplace. If Amazon ultimately sells a product at a price that results in it getting less than the agreed minimum profit, the first-party sellers are required to compensate Amazon for the difference.

This agreement apparently results in some first-party sellers incurring million of dollars in "true up" costs to Amazon. To avoid the payments, first-party sellers often increase the prices of their products to and on other online marketplaces — leading to artificially high prices on Amazon's rival online marketplaces.



Source: androidcentral

Popular posts from this blog

How to watch England vs India: Live stream Fourth Test cricket online

Having bounced back from defeat with an impressive win in the third Test at Headingley, Joe Root's men will be hoping they can now forge an advantage as the series moves to London - watch every ball of this fourth Test with our England vs India live stream guide below. England managed to dismiss India for just 78 on Day 1 in a scintillating bowling display, but there was even better to come from the hosts' top-order batting, with all of the top three managing to notch up half-centuries in their first innings. Skipper Root meanwhile continued his extraordinary 2021 form, clocking up yet another three-figure score. With a buoyant home side now hoping to carry on where they left off, India captain Virat Kohli and head coach Ravi Shastri must unravel how their attack was so routinely undone with the new ball last time out. Kohli himself will also need to do more leading from the front, with the normally reliably prolific batsman having scored no more than 55 during any inni

Google Pay on Wear OS expands again, is now available in 37 countries

More people will be able to use their Wear OS watch for payments. Update, Sept 8 (5:30 p.m. ET) : Google Pay support expands to more countries. What you need to know Google Pay is getting expanded support in more countries. 16 additional countries will support contactless payments on the Galaxy Watch 4. The expanded support will also come to older Wear OS smartwatches "in the coming weeks." With the launch of the Galaxy Watch 4 , Google has highlighted some of the new app experiences that will come with the new Wear OS 3 update. Google Pay is among the apps that are getting a redesign based on Material You, but Google also announced that it's expanding support for more countries. As it stands, Google Pay only supports a handful of countries for contactless payments on Wear OS. Google is now adding 16 additional countries to the list, which include the following: Belgium Brazil Chile Croatia Czech Republic Denmark Finland Hong Kong Ireland New Zeal

How to watch the Djokovic vs Medvedev: Live stream the US Open 2021 final o

History beckons for Novak Djokovic as the Serbian legend goes in search of two significant tennis records in this afternoon's grand finale at Flushing Meadows. Read on to find out how to get a 2021 US Open live stream and watch Novak Djokovic vs Daniil Medvedev online no matter where you are in the world. A win here for the 34-year old would see him overtake eternal rivals Roger Federer and Rafael Nadal for the most Grand Slam titles won, with all three veterans currently tied at 20 wins a piece. Victory in New York this afternoon would also see Djokovic complete the first male calendar slam in the Open Era. Aiming to make a piece of history of his own but stopping Djokovic is Russian star Daniil Medvedev who will be looking to finally claim his first slam title. The 25-year-old world no.2 has been in some of the best form of his career in the Big Apple having given up just a single set on his way to today's final. The match marks Medvedev's second major showdown

How to watch the Raducanu vs Fernandez: Live stream the US Open 2021 final

It's a battle of the teens at Flushing Meadows this evening as two youngsters who have stunned the tennis world go head-to-head - read on to find out how to get a 2021 US Open live stream and watch Emma Raducanu vs Leylah Fernandez online no matter where you are in the world. The last time the final at the Arthur Ashe Stadium was contested by two players yet to reach their 20s was when Serena Williams defeated Martina Hingis to take the title back in 1999 in a match that signalled a new era for the women's game. While both players in that match were something of a known quantity - Hingis was already world no.1 - both of today's finalists' trailblazing journeys to today's clash has come as something of a bolt out of the blue. Britain's Emma Raducanu had to go through the qualifying stage on her incredible route to this showdown, yet has yet to lose a set so far in the tournament. The 18-year-old now stands on the brink of becoming the first British woman