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Amazon is shutting down its third-party-seller program "Sold by Amazon" after the company was accused of price-fixing.
Washington Attorney General Bob Ferguson announced Wednesday that Amazon would end the program nationwide and pay $2.25 million to settle the allegations under a legally binding resolution.
Ferguson's lawsuit alleged that Amazon violated antitrust laws and "unreasonably restrained competition in order to maximize its own profits off third-party sales" by agreeing on prices with these sellers instead of competing with them.
"Consumers lose when corporate giants like Amazon fix prices to increase their profits," Ferguson said in a press release. "Today's action promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country."
The program ran from 2018 to 2020 and guaranteed third-party sellers a minimum payment for product sales "in exchange for their agreement to stop competing with Amazon for the pricing of their products," the release said. Whenever sales exceeded the minimum, Amazon split the extra proceeds with the sellers.
Amazon had its pricing algorithm match prices offered by some external retailers, the lawsuit said. This meant higher prices and lower sales for the sellers, as customers sometimes turned to Amazon's branded products instead.
"This resulted in Amazon maximizing its own profits regardless of whether consumers paid a higher price for sales of products enrolled in the 'Sold by Amazon' program or settled for buying the same or similar product offered through Amazon," the release said.
www.businessinsider.com
Washington Attorney General Bob Ferguson announced Wednesday that Amazon would end the program nationwide and pay $2.25 million to settle the allegations under a legally binding resolution.
Ferguson's lawsuit alleged that Amazon violated antitrust laws and "unreasonably restrained competition in order to maximize its own profits off third-party sales" by agreeing on prices with these sellers instead of competing with them.
"Consumers lose when corporate giants like Amazon fix prices to increase their profits," Ferguson said in a press release. "Today's action promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country."
The program ran from 2018 to 2020 and guaranteed third-party sellers a minimum payment for product sales "in exchange for their agreement to stop competing with Amazon for the pricing of their products," the release said. Whenever sales exceeded the minimum, Amazon split the extra proceeds with the sellers.
Amazon had its pricing algorithm match prices offered by some external retailers, the lawsuit said. This meant higher prices and lower sales for the sellers, as customers sometimes turned to Amazon's branded products instead.
"This resulted in Amazon maximizing its own profits regardless of whether consumers paid a higher price for sales of products enrolled in the 'Sold by Amazon' program or settled for buying the same or similar product offered through Amazon," the release said.
Amazon will shut down its 'Sold by Amazon' 3rd-party-seller program and pay $2.25 million to settle price-fixing allegations
Washington's attorney general said Amazon "unreasonably restrained competition in order to maximize its own profits off third-party sales."
www.businessinsider.com
