The Washington, D.C. attorney general has asked an appeals court to reinstate an antitrust lawsuit accusing Amazon of placing anticompetitive restrictions on vendors that sell products through the tech giant's marketplace.
“Amazon wields its enormous market power by requiring its millions of third-party sellers to agree that the listed price on Amazon for any product will be the lowest available,” Attorney General Brian Schwalb writes in papers filed this week with the D.C. Court of Appeals.
He adds that those agreements, known as “most favored nation” deals, result in higher prices for consumers.
“Because Amazon has much higher fees than other marketplaces, sellers could profitably charge a lower price on competing websites were it not for Amazon’s (most favored nation clauses),” the attorney general argues.
The legal battle dates to May of 2021, when former District of Columbia Attorney General Karl Racine alleged in an antitrust complaint that Amazon prevents third-party vendors on its platform from charging lower prices at other sites -- including the vendors' own retail platforms. He argued that the policy resulted in higher prices for consumers.
Amazon said that in 2019, it stopped prohibiting third-party vendors from charging lower prices elsewhere on the web. But Racine alleged that Amazon merely replaced that prohibition with a similar “fair pricing policy” mandate.
District of Columbia Superior Court Judge Hiram Puig-Lugo dismissed the lawsuit last year for several reasons, including that the complaint against Amazon was too vague.
“The District simply repeated vague conclusion after vague conclusion devoid of facts to support the vague conclusions it repeatedly stated,” Puig-Lugo wrote.
The attorney general is asking the Court of Appeals to reverse that ruling, arguing that the complaint “plausibly alleged that Amazon’s contracts with third-party sellers and suppliers are anticompetitive.”
In September, California Attorney General Rob Bonta brought a similar case against the company in that state. That matter is still pending.