Amazon Accused In Massive Price-Fixing Scheme

Amazon was hit with antitrust claims in Seattle federal court over an alleged “pricing scheme that broadly and anti-competitively impacts virtually all products offered for sale in the US retail e-commerce market,” reported Bloomberg. 

“Amazon’s horizontal price-fixing agreement with its two million sellers is a per se violation of antitrust law,” the lawsuit claims.

The proposed consumer class action targeting the e-commerce giant, which is responsible for 49% of US online retail sales, was filed late Thursday, March 19, in the US District Court for the Western District of Washington.

The suit accuses Amazon of continuing to enforce de facto “most favored nation” pricing terms against 2 million third-party sellers offering 600 million products, despite promising the Federal Trade Commission last year that it would stop.

When the mega-retailer abandoned that policy, it was supposed to begin permitting merchants to offer lower prices through cheaper competing platforms, like eBay or their own websites, according to the complaint.

The companies should be able to turn the same profit at a lower price on those other platforms, which should in turn reduce Amazon’s prices through competition, the suit states.

But Amazon allegedly reframed the same rule as a requirement of its “fair pricing” agreements with third-party sellers, which account for 68% of its total sales. The provision explicitly requires any product sold on Amazon to “have a price that is equal to or lower than the price of the same item being sold by the seller on other sites,” according to the complaint.

“Sellers are contractually barred or severely penalized from passing on these savings to their customers,” the suit states.

Thanks to Amazon’s dominance in the e-commerce market, its policies have jacked up prices across the board, the consumer plaintiffs claim.

The company also allegedly “exercises a significant level of control over the flow of available information to consumers on the internet.” Other large retailers like Walmart and Target recently complained to the FTC that they can’t break through the “information bottleneck” caused by the “collective control” Amazon and Google have over online product searches, the suit says.

Full Content: Bloomberg

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