AMAZON SHUTS DOWN PRICE-FIXING PROGRAM BY PAYING $2.25M

Karimi & Associates Law Firm represents according to Jurist:

Washington state Attorney General, Bob Ferguson, announced that Amazon will pay $2.25 million to his office and shut down its “Sold by Amazon” third-party seller program after a lengthy price-fixing investigation by his office’s Antitrust Division.

Ferguson’s lawsuit alleged that Amazon violated antitrust laws and “unreasonably restrained competition in order to maximize its own profits off third-party sales” by agreeing on prices with these sellers instead of competing with them.

Ferguson’s office filed a resolution in the King County Superior Court. Because a consent decree is a court order agreed to by all parties after settlement negotiations, Amazon is bound to the terms of the settlement. The multi-million dollar payment from Amazon will fund further investigations by the Antitrust Division.

Presently, over half of all Amazon sales are through third-party sellers. The “Sold by Amazon” program allowed Amazon to increase its profits on such sales. Amazon negotiated with sellers to provide them with a minimum profit for sales while pocketing any additional profit. However, Amazon’s algorithm automatically matched low prices from other retailers.

Sellers in the program were unable to compete with external prices and Amazon’s own prices. They experienced stagnated sales while still paying Amazon fees for things like storage.

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