Washington state Attorney General Bob Ferguson announced on Wednesday, January 26, that, as a result of his office’s price-fixing investigation, Amazon will shut down the “Sold by Amazon” program nationwide.
The Attorney General’s Office simultaneously filed a suit and a legally binding resolution in King County Superior Court. As part of the legally enforceable consent decree, Amazon must stop the “Sold by Amazon” program nationwide and provide the Attorney General’s Office with annual updates on its compliance with antitrust laws. In addition, Amazon will pay US$2.25 million to the Attorney General’s Office, which will be used to support the Attorney General’s antitrust enforcement, which does not receive general fund support.
The “Sold by Amazon” program allowed the online retailer to agree on price with third-party sellers, rather than compete with them. Ferguson’s lawsuit asserted that the program violated antitrust laws. Amazon unreasonably restrained competition in order to maximize its own profits off third-party sales. This conduct constituted unlawful price-fixing.
Amazon offered the “Sold by Amazon” program from 2018 through 2020 on an invitation-only basis. It invited several hundred third-party sellers with whom it had previously competed for online consumer sales on its online marketplace and other e-commerce platforms.
“Consumers lose when corporate giants like Amazon fix prices to increase their profits,” Ferguson said. “Today’s action promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country.”
There are about 2.3 million third-party sellers on Amazon worldwide, according to information from a 2018 Amazon letter to its shareholders. Over the last two decades, Amazon’s sales of its own branded products grew from US$1.6 billion in 1999 to US$117 billion in 2018. Over that same period, third-party sales grew exponentially from US$100 million in 1999 to US$160 billion in 2018. Third-party sales account for over half the sales on Amazon.
Washington state ranks among the top 10 states in the nation with the fastest growing rate of third-party sellers on its online marketplace.
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