The way Amazon uses its market power is in the sights of justice in the United States. The prosecutor of the US capital Washington launched a lawsuit Tuesday against the giant of the online commerce, which he accuses of obstructing competition.
“Amazon’s behavior and its market share prove its intention to build a monopoly, with a dangerous probability of success”, details the complaint of prosecutor Karl Racine. He criticizes Amazon for preventing companies from selling their cheaper products anywhere other than on his platform. The judge is therefore asking for damages as well as measures to prohibit these practices.
Commissions “up to 40% of the product price”
According to Karl Racine, the Seattle group “maximizes its profits at the expense of sellers and consumers forced to pay artificially high prices, while harming competition and innovation.” “It’s exactly the opposite,” said an Amazon spokesperson. “Traders determine their prices for the products they sell in our store.”
But to establish his accusations, the magistrate is targeting in particular a clause in contracts with traders, which prohibited them from offering their goods at lower prices on other sites. However, Amazon says it stopped this practice in 2019. “In fact, they quietly replaced this clause with one, equivalent, which says that third-party sellers can be sanctioned or fired from Amazon if they market their products for prices. lower elsewhere ”, assures the judge. He also mentions the “high commissions” taken by the firm, “up to 40% of the price of the product”.
The complaint therefore calls for “withdrawing from Amazon the ability to harm competition”, including by resorting to structural measures, which may mean dismantling. “The attorney general’s demands would force Amazon to post higher prices for customers, which is paradoxically contrary to the essential objectives of antitrust laws”, for its part commented the group. “It would also hurt small and medium-sized businesses, which are already struggling enough right now,” said Ryan Young, an analyst at the Competitive Enterprise Institute think tank.
With this complaint, pressure continues to mount in the United States, but also in Europe, against Gafa (Google, Apple, Facebook, Amazon) whose behavior is considered anti-competitive. Joe Biden, for example, has announced his intention to appoint lawyer Lina Khan as head of the US competition agency (FTC). This scholar first became known in the academic world in 2017, while she was still a student, by publishing an article entitled Amazon’s antitrust paradox in a Yale University journal. She considered that the American legislative arsenal was insufficient to fight against monopoly practices.