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The D.C. Attorney General is suing Amazon over price inflation

Time for some antitrust action.

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Image: KnowTechie

A new lawsuit brought by D.C. Attorney General Karl Racine is accusing Amazon of violating the city’s Antitrust Act, by inflating prices and abusing its monopoly in online sales.

Filed on Tuesday, the suit alleges that Amazon has been “illegally abusing and maintaining its monopoly power by controlling prices across the online retail market” for years now.

No, the lawsuit isn’t about the jacked-up prices from the early stages of the pandemic, where everything from humble toilet paper to hand cleanser had up to 1,000% mark-up. It’s focused on the restrictions that third-party sellers have to agree to when they decide to sell on Amazon.

Those agreements don’t ban the third-party sellers from selling their goods elsewhere, but they do forbid them selling their products cheaper on any other site, even on their own website. That’s what’s known as a “most favored nation” agreement, and it’s a shady-as-fuck way for Amazon to ensure the longevity of its stranglehold on online shopping in this country.

Racine is also arguing that the third-party seller agreements artificially inflate prices, as the fees paid to Amazon by third-party sellers can be as high as 40% of the item’s price. That jacks up the prices on websites not owned by Amazon, as sellers are forced to agree that they can’t sell their goods for less anywhere else.

Oh, and in case you think Amazon doesn’t have a monopoly on online sales? It’s estimated they have somewhere between 50 and 70% of the US online market. The next-largest platforms, Walmart and eBay, have about 5% each.

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