The District of Columbia filed suit against Amazon this week, alleging that its pricing policies for third-party sellers help the online giant "build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act" according to an announcement from the Office of the Attorney General.  Specifically, the suit alleges that Amazon controls the prices that third-party sellers set on other platforms, requiring them to incorporate Amazon’s fees, as high as 40% of sales, into pricing even on the seller’s own website.

The policies raise prices for consumers, stifle competition in the online retail market, and deprive consumers of choice, the OAG said.

The OAG laid out the history of Amazon’s policies.  Until 2019, Amazon incorporated Most Favored Nations provisions into its agreements with third-party sellers, preventing them from offering their products at lower prices on other platforms.  In 2019, Amazon removed that policy and replaced it with its Fair Pricing Policy, which the OAG argues is "an effectively-identical substitute" that allows the platform to sanction or remove sellers if they sell at lower prices on other platforms.

The lawsuit was filed in District of Columbia court under District laws, so applies only to Amazon in Washington, D.C., but is a sign that governments are starting to look at how Amazon’s own sales and its marketplace, which the OAG said offers products from over two million third-party sellers, are dominating e-commerce.