Amazon Exploiting Third-Party Sellers?

Issue 73

On Tuesday, May 25th, the District of Columbia filed an antitrust lawsuit against Inc. claiming that Amazon is preventing sellers from offering lower prices on other websites outside of Amazon.

The lawsuit targeted contracts between Amazon and their sellers in which sellers are unable to price their product lower on other websites including their own.  Amazon refuted this argument stating that “Like any store we reserve the right not to highlight offers to customers that are not priced competitively,” and that sellers are able to choose the price tag of their product on the Amazon website.  In addition, the competitive low prices offered by Amazon are primarily implemented to help consumers.  However, Amazon is able to obtain 40% of a product's price through fees further limiting profits of the original retailers.  Sellers are reluctant to then avoid selling on Amazon as the Amazon marketplace accounts for over half of all online retail sales.

Other antitrust lawsuits have been filed against Amazon in the past regarding similar practices and creating unfair competition for the third-party sellers on the Amazon marketplace.  This lawsuit, however, is against Amazon in regard to violations of Washington D.C. law.  Because of this, the lawsuit will likely result in little to no change for Amazon’s practices across the country.

Source: Wall Street Journal