Amazon has too much control over how much outside vendors can charge for their products, the attorney general of Washington, DC, said in a Twitter thread Tuesday, a power that pushes prices higher for consumers. Karl Racine made the remarks as he unveiled a lawsuit alleging the e-commerce giant’s ability to strip privileges from vendors who charge lower prices at other retailers violates the district’s antitrust laws.
Contracts between Amazon and third-party vendors “impose an artificially high cost floor across the online retail marketplace,” Racine said, arguing the rules push prices higher everywhere because sellers have to account for the cut Amazon takes.
The e-tailer denied Racine’s claim.
“Like any store we reserve the right not to highlight offers to customers that are not priced competitively,” the spokesperson said. “The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”
In 2019, Amazon removed a contract provision that expressly forbade third-party sellers from charging lower prices outside of its marketplace. Racine alleges, however, that a similar provision currently in effect has essentially kept the restriction in place.
Third-party sellers whose products can be found for less outside of Amazon may lose the “buy box” button on their listings that allows customers to buy items with one click, according to Inc. The company can also revoke selling privileges from the vendor.
“Amazon forecloses its platform competitors’ (including [third party sellers’] own sites) ability to compete on price and gain market share, enabling Amazon to maintain its dominance within the online retail sales market,” according to the lawsuit.