Amazon antitrust suit expanded to wholesale operations
Simon / Pixabay
Amazon antitrust suit expanded to wholesale operations

The Attorney General for the District of Columbia, Karl Racine, expanded his antitrust lawsuit against Amazon on Monday.

Racine filed suit in the Superior Court of the District of Columbia in May, claiming that Amazon violated the District of Columbia Antitrust Act. This is the first major antitrust suit against Amazon in the US and is not being brought under federal antitrust legislation, such as the Sherman Act.

Other state attorneys general and the Federal Trade Commission are currently investigating and weighing lawsuits against Amazon, while European regulators are launching their second antitrust probe.

Racine recently amended the complaint to include claims that Amazon requires first-party retailers (those who sell directly to Amazon, which then resells those goods to consumers) to guarantee Amazon a set profit margin on wholesale goods. If Amazon lowers its prices in order to compete with third-party retailers, Racine alleges that Amazon’s contracts require wholesalers to compensate Amazon for the lost profits in the form of additional products. Racine claims that this further entrenches Amazon’s market dominance, as wholesalers are forced to raise prices for other retailers in order to offset the losses incurred by selling with Amazon.

Amazon claims that wholesalers are allowed to set their own prices and that the relief sought by the Attorney General would increase consumer prices.

Amazon is represented by the Paul, Weiss lawfirm in this lawsuit, which is expected to take its next steps in late October.