To receive fast, convenient access to countless products and digital streaming, consumers may consider Amazon as the prime option. The benefits offered by Amazon extend beyond the consumer-driven perks, and also include opportunities for retailers and suppliers to sell their products on the platform. Despite these incentives, the DC Attorney General has recently filed a lawsuit against the e-commerce company, citing antitrust claims. According to the filing, Amazon has developed into a monopoly that manipulates pricing options for consumers. The company has achieved this position by entering contractual agreements with its third-party sellers. Specifically, the contracts dictate that in order to participate on the platform, the sellers are forbidden from offering lower prices or improved purchase terms on any other websites, including their own personal sites.
These stipulations result in the considerably high prices for products and the elimination of market competition. Individual sellers are not the only pawns in Amazon’s operation. The company is also working with large book publishers to stabilize e-book pricing. Despite facing the impact of legal ramifications, Amazon has provided a defense that presents the company in a positive light. Primarily, Amazon addresses its position within the market of individual products and asserts that it is not a leading competitor for every item offered on the website. Additionally, Amazon supports its business relationship with third-party sellers and claims that the contracts provide an equal opportunity for positive business growth. Sellers are afforded the freedom to create their own pricing structures, and Amazon reserves the right to refrain from advertising offers to consumers that are not necessarily competitive.
While it is the hope that this legal matter reaches class action status, this is not the first lawsuit filed in response to antitrust behavior in the technology industry. Google was subjected to accusations of sustaining a monopoly in advertising and search engine optimization. Given the previous antitrust lawsuit against Facebook, it is evident that social media platforms also lack competition. To prevent the perpetuation of this type of business conduct, those who are against these monopolies are pushing for stronger legislation.Google+