DC Attorney General Files Antitrust Lawsuit Against Amazon

Amazon shares skidded to session lows just before noon ET on Tuesday after Washington DC’s Attorney General Karl Racine unveiled a new anti-trust lawsuit against the e-commerce giant, alleging that the company’s practices have unfairly raised prices for consumers while suppressing competition and innovation.

As a result, the lawsuit is seeking to end Amazon’s use of allegedly illegal price agreements to edge out competitors, recover damages and impose penalties. The lawsuit alleges that Amazon’s conduct made it virtually impossible for third-party sellers to offer goods at a better price than Amazon.

Washington DC AG Karl Racine

The lawsuit, filed in Washington DC Superior Court, alleged that Amazon illegally maintained monopoly power by using contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms. The attorney general’s office claimed the contracts create a “an artificially high price floor across the online retail marketplace,” according to a press release. The AG claimed these agreements ultimately harm both consumers and third-party sellers by reducing competition, innovation and choice.

Until 2019, Amazon included a clause in its third-party seller agreement that they couldn’t offer goods on Amazon at a higher price than they were offered on other third-party platforms. Amazon eventually removed that provision amid growing anti-trust scrutiny.

The lawsuit comes as state AGs and the DoJ filed antitrust lawsuits against Google and Facebook; Amazon is also reportedly in the sights of federal regulators. But Tuesday’s action comes from Racine’s office alone.

Racine said on a call with reporters on Tuesday that the central focus of the lawsuit – contracts known as “most favored nation” agreements – was something that he felt should be taken on independently due to the sheer amount of work involved in bringing these types of lawsuits.