Amazon.com (AMZN) - Get Amazon.com, Inc. Report faces a lawsuit from the Washington, D.C. attorney general’s office charging the online retail colossus with deploying anti-competitive actions to keep prices high.
“Today my office filed an antitrust lawsuit against Amazon for illegally abusing and maintaining its monopoly power by controlling prices across the online retail market and violating DC law,” Attorney General Karl Racine wrote on Twitter.
“For years, Amazon has controlled online retail prices through its restrictive contract provisions & policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online -- including their own websites -- for a lower price than on Amazon.”
Further, “These agreements also impose an artificially high price floor across the online retail marketplace & ensure high fees charged to third-party sellers by Amazon, as much as 40% of the product price, are incorporated into the price on not only Amazon but also on competing platforms,” Racine tweeted.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of 3rd party sellers & consumers forced to pay artificially high prices, while harming competition & innovation & illegally tilting the playing field.”
The news had little impact on Amazon shares, which were barely changed at $3,244. The stock has gained only 4% over the past six months amid valuation concerns.
Meanwhile, media reports say Amazon is close to buying TV/movie producer MGM Holdings for almost $9 billion.
TheStreet.com founder Jim Cramer doesn’t see such a deal having a huge impact on Amazon.