Amazon was hit with a new antitrust lawsuit by a Minnesota woman on Wednesday. The class action complaint, filed in the Western District of Washington, alleges that Amazon’s anticompetitive conduct leads to higher prices for Amazon users.
The suit claims that Amazon is violating tying laws under the Sherman Act by forcing sellers on its platform to use its fulfillment services, as opposed to its competitors’ such as FedEx and UPS, by only showing shoppers these products on its website. Ninety percent of consumer purchases on Amazon are made through the Buy Box, the section on the right of a product page where customers can make purchases, the complaint said. The only products featured in the Buy Box are from sellers who have a Prime Badge, and the only way to receive a Prime Badge is to use Amazon’s fulfilment services, the filing continued.
“If two Sellers—one of whom pays for Amazon’s Fulfillment services while the other doesn’t—offer the same product on Amazon.com, the Seller who pays Amazon for Fulfillment services will ‘win’ the Buy Box and make the sale, even if the competing Seller offers a lower total price and faster, more reliable shipping,” court documents state.
Not only does Amazon allegedly force its sellers to use its fulfillment services, but it also forces them to overpay for them, the plaintiffs claimed. According to the suit, Amazon’s logistics fees cost as much as 35 percent more than competing services. Sellers purportedly pass on this price increase to consumers, charging more for products to meet their margins. The suit estimates that Amazon overcharged consumers by approximately $5 billion in 2020, and billions of dollars more in the preceding years.
“Amazon’s unlawful tying scheme harms hundreds of thousands of businesses and hundreds of millions of consumers,” the plaintiffs state. “The only winner is Amazon, which earns billions as a result of its uncompetitive conduct while continuing to gain economic power in all markets it enters.”
The plaintiffs are represented by Beth E. Terrell and Adrienne D. McEntee of Terrell Marshall Law Group LLC.
Amazon is also currently being sued for similar antitrust allegations by another party in Washington and in the District of Columbia.
