DC Sues Amazon Over Price Leverage

Filing targets 'most favored nation' clauses affecting marketplace
By Bob Cronin,  Newser Staff
Posted May 25, 2021 2:29 PM CDT
DC Sues Amazon Over Price Leverage
Amazon tractor-trailers line up outside the Amazon Fulfillment Center in the Staten Island borough of New York last year.   (AP Photo/Mark Lennihan)

Saying that Amazon keeps marketplace prices up by preventing sellers from offering better deals on other sites, the District of Columbia has filed an antitrust lawsuit against the company. The provisions, called "most favored nation" clauses, won't allow sellers to even offer lower prices on their own websites, DC Attorney General Karl Racine said. "Amazon wins because it controls pricing across the online retail sales market, putting itself at an advantage over everyone else," Racine told reporters, the Wall Street Journal reports. "These restrictions allow Amazon to build and maintain monopoly power." The suit wants such pricing practices ended and asks for damages and penalties, as well as actions to thwart anti-competitive practices generally, per CNBC.

"The DC Attorney General has it exactly backwards—sellers set their own prices for the products they offer in our store," Amazon said in a statement Tuesday, adding that "like any store we reserve the right not to highlight offers to customers that are not priced competitively." The company argues the actions sought in the suit, which was filed in DC Superior Court, would actually increase prices. The suit argues Amazon's practices not only reduce competition but innovation. The market's reaction to the suit was muted, with Amazon shares off 1% Tuesday afternoon. The marketplace now accounts for more than half of Amazon's overall sales. (Google faces multiple antitrust challenges.)

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