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DC attorney general sues Amazon on antitrust grounds, alleges it illegally raises prices

Washington, DC Attorney General Karl Racine speaks after a news conference in front of the U.S. Supreme Court September 9, 2019 in Washington, DC.

Alex Wong

Washington, D.C. Attorney General Karl Racine announced Tuesday he’s suing Amazon on antitrust grounds, claiming the company’s practices have unfairly raised prices for consumers and suppressed innovation.

Racine is seeking to end Amazon’s allegedly illegal use of price agreements to edge out competition, recover damages and impose penalties to deter similar conduct.

Shares of Amazon barely moved on the announcement, down 1% as of Tuesday morning.

The lawsuit, filed in D.C. Superior Court, alleges Amazon illegally maintained monopoly power by using contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms. The attorney general’s office claimed the contracts create a “an artificially high price floor across the online retail marketplace,” according to a press release. The AG claimed these agreements ultimately harm both consumers and third-party sellers by reducing competition, innovation and choice.

Amazon requires third-party sellers who want to do business on the online marketplace to abide by its business solutions agreement. Until 2019, Amazon included a clause in that document, referred to as a “price parity provision,” which prohibited sellers from offering their products on a competitors’ online marketplace at a lower price than what their products sold for on Amazon.

Amazon quietly removed that provision in March of 2019 amid growing antitrust scrutiny.

The lawsuit comes months after federal and state enforcers filed antitrust lawsuits against Google and Facebook.

Both of those lawsuit involved large coalitions of states banding together to file the lawsuits, but Tuesday’s action comes from Racine’s office alone.

Amazon did not immediately respond to a request for comment.

This story is developing. Check back for updates.

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