Amazon Hit with Antitrust Lawsuit - What You Need to Know

Amazon Hit with Antitrust Lawsuit - What You Need to Know

Amazon may be facing a lawsuit that smells like Epic v. Apple. The attorney general in Washington, D.C., has launched an antitrust lawsuit against the company for allegedly impeding competition in Amazon's marketplace, the division responsible for granting third-party sellers access to Amazon's platform.

At the heart of the lawsuit are claims that Amazon is making unreasonable demands on third-party sellers of its platform. This is identical to one of Epic's claims against Apple. Attorney General Carl Racine argues that this will result in a loss of competition and a decline in innovation. [Amazon's online retail sales platform benefits from and is protected by Amazon's anticompetitive business practices. Rather than ensuring that consumers have access to the best products at the lowest prices, Amazon causes prices in the entire online retail sales market to be artificially inflated, both for products sold on Amazon's online retail sales platform and on the online retail sales platforms of its competitors.

Racine seeks a structural remedy that would force Amazon to change its rules, thereby eliminating the price restrictions. It also seeks damages to curb further anti-competitive conduct.

The lawsuit claims that Amazon accounts for about 50-70% of all online retail sales in the U.S., putting it significantly ahead of companies such as Walmart and eBay. It also notes that Amazon changed the rules for third-party sellers in 2019, which required price equivalence. It was eliminated in response to government concerns, but was later replaced with a nearly identical fair pricing policy that imposed very similar restrictions on sellers.

Amazon was also challenged over this policy in 2013 in courts in the UK and Germany. However, Amazon chose to withdraw these rules for its European stores, leaving the rules in place for the U.S. and the rest of the world.

Amazon has not yet commented on the lawsuit, but we will update this article if we hear back from the company.

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