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A Washington, DC court has reopened a 2021 lawsuit against Amazon concerning allegations that it imposes unfair pricing strategies on its sellers.
In 2021, the then Attorney General of Washington, DC filed a case against Amazon for potentially anti-competitive practices against sellers and misusing its dominance in the online marketplace. After originally being dismissed the following year, the case has now been reopened by an appeals court in DC.
The case was initially filed in 2021 by the District’s former Attorney General, Karl Racine, based on the unfair tactics to blackmail third-party sellers. It alleged Amazon’s “Fair Pricing Policy” prevented sellers from offering better prices on any competitor platforms by threatening to delist or deprioritize their products from Amazon search or even disabling sellers’ accounts entirely.
As per the policy’s current description, “Amazon regularly monitors the prices of items” and compares them to prices at other online stores. If it finds prices on other stores “harm customer trust,” it can remove the offer, suspend shipping support, or even terminate sellers’ accounts entirely. The original complaint alleged Amazon maintains its price as the “price floor,” which allows it to establish an “unlawful monopoly” in the online selling business.
An Amazon spokesperson previously defended the company’s stance and was quoted saying, “like any store we reserve the right not to highlight offers to customers that are not priced competitively.”
Notably, a previous version of the policy, directly forbidding sellers from offering better prices elsewhere, was scrapped earlier in 2019 under the looming threat of an investigation by the Federal Trade Commission. However, it was allegedly replaced by the policy noted in the 2021 lawsuit. Months later, the lawsuit was also amended, alleging that the tech giant bound wholesalers into agreements to ensure it made a certain minimum profit.
However, the motion was dismissed by the Superior Court of Washington, DC, though the exact grounds for dismissal were not revealed. Besides reversing the previous dismissal, senior judge John R. Fisher noted in his judgment that “challenged agreements plausibly suggest that Amazon either already possesses monopoly power over online marketplaces or is close to a ‘dangerous probability of achieving monopoly power.’”
Amazon’s spokesperson expressed their disagreements and said the company looked forward to “presenting facts” that back the said policies are favorable to consumers. Despite its defiance, the judgment adds to a row of legal troubles for the company, including several antitrust allegations by the FTC and comes weeks after a US consumer rights body reprimanded Amazon for allowing low-quality and potentially hazardous products on its platform. Additionally, the FTC’s counterpart in the UK has launched another investigation into Amazon’s multi-billion-dollar investment in AI startup and OpenAI competitor, Anthropic.
