Article written by Haim Ravia and Dotan Hammer
The Attorney General of the District of Columbia (DC) in the United States is taking legal action against Amazon.com alleging violation of DC’s local anti-trust law. The action was filed in a local court in DC, alleging that “Amazon dominates the online retail sales market, controlling between 50-70% of all online retail sales in the U.S.”. It also alleges that “Amazon holds an even larger market share of multi-seller online retail platforms”.
The DC attorney general’s complaint accuses Amazon.com of causing prices to be artificially inflated as it concerns independent, third-party sellers. The complaint accuses Amazon.com of horizontal and vertical agreements in restraint of trade, in violation of DC’s anti-trust law.
According to the complaint, Amazon.com effectively prohibits and deters third-party sellers from offering their products on a competing platform at a lower price or better terms than on Amazon.com. Third-party sellers are effectively forced to incorporate Amazon.com’s high fees and costs into their product prices, “sometimes equaling up to 40% of the total product price” as per the complaint. These sellers had to maintain their higher pricing not only on Amazon.com but also on all other platforms through which they sell.
The complaint also charges Amazon of acquiring and illegally maintaining monopoly power in the online retail sales market. It is also accused of causing less choice for consumers and third-party sellers in the online retail sales market, suppressing innovation, and reducing investment in potentially competing online retail sales platforms.
The DC attorney general is seeking court reliefs in the form of an injunction against Amazon.com’s actions in restraint of trade, the appointment of a monitor to ensure Amazon.com’s compliance with the court’s orders, a civil penalty in the maximum amount provided by DC law, actual damages, statutory damages, punitive or treble damages under DC law, disgorgement of profits and reasonable attorney fees.
CLICK HERE to read the District of Columbia’s Complaint against Amazon.com, Inc.
