Connect with us

Hi, what are you looking for?

Brand

Amazon Under Fire For Antitrust Violations From Washington Attorney General

Amazon is not only an eCommerce platform but also a seller, fixing a price point with a third-party seller is violative of the competition for other sellers.

Amazon Employees Plan Global Strike On Black Friday To Make Amzon Pay

Amazon had a product segment on their platform titled ‘Sold by Amazon’. These products would be provided by a third-party seller but Amazon would decide the price that would go up on the platform. If Amazon was able to sell it for more than the price quoted by the seller, both parties would share the extra profit.

The Washington Attorney General has called this strategy price-fixing, and since then Amazon has shut down this particular product segment. The brand however claims that their shutting down of the ‘Sold by Amazon’ products is unrelated to the investigation by the AG. The AG had also filed a lawsuit against the eCommerce giant. Amazon has chosen to settle matters outside the court and will be paying reparations of $2.25 million.

According to the Washington AG, the ‘Sold by Amazon’ model directly violates the antitrust laws in the state of Washington. Since Amazon is not only an eCommerce platform but also a seller, fixing a price point with a third-party seller is violative of the competition for other sellers. Since Amazon can dynamically increase and decrease the prices of their products; it prevents other sellers from offering discounts. Since the removal of the segment, the prices for these products have gone up.

The AG further stated that two sellers having a secret agreement is the basic definition of price-fixing, and Amazon was guilty of this. The eCommerce platform denied commenting on the matter. The ‘Sold by Amazon’ product section has been operational since 2018, but was quickly taken down following the lawsuit and investigations. They have clarified via a statement that the removal of the segment was not in relation to the charges they are facing and that the process was entirely legal.

Click to comment

Leave a Reply

Your email address will not be published.