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D.C. Amends Amazon Antitrust Suit to Target Wholesalers

Washington, D.C., Attorney General Karl Racine reportedly amended an antitrust complaint against Amazon to include first-party sellers.
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Washington, D.C., Attorney General Karl Racine expanded an antitrust complaint against tech and online-retail giant Amazon  (AMZN) - Get Amazon.com, Inc. Report over its relationships with wholesale suppliers, a media report says.

Racine's amended complaint expands on his initial allegations against the Seattle company and how Amazon's contracts with third-party sellers allegedly stifle competition, the Washington Post reported Monday. 

The amended complaint alleges that Amazon illegally stifles competition by requiring first-party sellers, or wholesalers, to guarantee that the company will make a minimum profit when it buys and resells their goods under the Amazon brand. 

Racine says his investigation has shown that the arrangements "insulate Amazon's online marketplace from competition, further entrench its monopoly, and result in higher prices and less choice for consumers," the Post reported. 

The Post is owned by Amazon's founder and executive chairman, Jeff Bezos. 

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Racine initially filed his complaint against Amazon in May saying that the company was "illegally abusing and maintaining its monopoly power by controlling prices across the online retail market and violating DC law." 

Third-party partners sell their products on Amazon under their own brand names. Amazon has millions of third-party sellers on its platforms.

Amazon's deal with wholesalers allows the company to lower its prices to undercut competitors while forcing wholesalers to compensate the company for any lost profit. That compensation then forces wholesalers to raise prices elsewhere, including when selling to Amazon's rivals, according to the complaint.

Amazon referenced a previous statement to CNBC in responding to the amended lawsuit: "The DC attorney general has it exactly backwards -- sellers set their own prices for the products they offer in our store. The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."

Shares of Amazon at last check were unchanged at $3,469. 

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