Regulators have gone after third-party sellers on Amazon for engaging price-fixing, but today, news comes that Washington State’s Attorney General went after Amazon itself with similar charges, asserting one of its programs violated antitrust laws.
Amazon will shut down the “Sold by Amazon” program nationwide and will pay $2.25 million to the Attorney General’s Office, which will be used to support its antitrust enforcement, according to a press release from AG Bob Ferguson’s office.
According to the Seattle Times, the “Sold by Amazon” program ran from 2018 to 2020 and didn’t include all third-party sellers – “The company characterized it as a small program offering another tool to businesses,” it reported.
According to the AG’s press release:
“(Attorney General) Ferguson asserted Amazon enticed sellers into the “Sold by Amazon” program by guaranteeing that they would receive at least an agreed upon minimum payment for sales of their consumer goods in exchange for their agreement to stop competing with Amazon for the pricing of their products.
“Consequently, if sales exceeded the negotiated minimum payment, Amazon and its competitors split the surplus proceeds amongst themselves.
“For example, if a seller and Amazon agreed to a $20 minimum payment and the item sold for $25, the seller would receive the $20 minimum price and share the $5 additional profit with Amazon, in addition to any fees.”
The AG went into more detail in the press release (titled, “AG Ferguson investigation shuts down Amazon price-fixing program nationwide”), but a spokesperson for Amazon told the Seattle Times that it believes the program was legal and good for consumers – “Amazon acted as the retailer and purchased products from suppliers to fill a customer order, ensuring low prices for consumers.”
We described the most recent case of Amazon sellers being prosecuted for price-fixing in this January article that reported the Feds charged sellers with agreeing to “raise and maintain the prices of DVDs and Blu-Ray Discs sold in their Amazon Marketplace storefronts.”
For those keeping score, the AG’s press release included information about “previous Amazon antitrust cases” in Europe and in the US. One noteworthy case it cited:
“In May 2021, District of Columbia Attorney General Karl Racine filed a lawsuit against Amazon for fixing its online retail prices through contract provisions and policies its third-party sellers sign. The provisions and policies, known as “most favored nation” agreements, prevented third-party sellers that offer products on Amazon from offering their products at lower prices or on better terms on any other online platform, including their own websites.”
The press release also included a link to “information about filing a complaint against Amazon or any other antitrust or consumer protection issue in Washington state.”