The city of Washington, D.C. has expanded its antitrust action against Amazon (NASDAQ:) to include agreements with wholesalers and third-party sellers, according to city Attorney General Karl Racine’s office.
In May, the city filed a lawsuit against Amazon, arguing that its regulations prevented third-party vendors from selling for less on Amazon. Fees of up to 40% of the total price are included in Amazon’s prices.
Amazon has agreements with wholesalers that guarantee it a minimum profit, according to the current complaint. As a result, if Amazon reduces a price to compete with another online seller, the wholesaler is required to pay Amazon the difference between the price it sells at and the agreed minimum, according to the complaint. According to the complaint, these subsidies act as a deterrent to wholesalers lowering their prices in order to compete.Amazon, in a move to dismiss filed on Friday, said that the complaint filed in Washington, D.C., was incorrect.
It added in a statement that “sellers determine their own rates for the products they provide in our market.” “Amazon is proud to offer cheap pricing across the widest assortment, and we reserve the right, like any retailer, to not showcase items to customers who are not priced competitively.”