Amazon Caught In New Antitrust Violation Accusation

In a letter sent to Congress, an online merchant has accused Amazon of forcing themselves and other sellers to use the company’s expensive logistics services, which has led to sellers being forced to raise its prices for consumers to cover these extra expenses.

First reported on Bloomberg, the 62-page document, based on an analysis of thousands of Amazon transactions over several years, accuses Amazon of “tying” its marketplace and logistics services together.

This is considered an antitrust violation in which a company uses dominance in one market to give itself an advantage in another, less-established market.

“When it comes to Amazon’s dealings with third-party merchants, some of the conduct actually does lend itself to antitrust scrutiny,” Hal Singer, an antitrust expert and Georgetown University adjunct professor, told Bloomberg.

“If you can connect the conduct to some measurable harm, in this case increased prices, that gets you into the antitrust ballpark.”

Amazon has disputed many of the new allegations, claiming its “logistics prices are competitive, and its sellers aren’t penalised for using other delivery options”.

“Amazon has invested tens of billions of dollars in developing a world-class fulfilment network and we offer that network to sellers at highly competitive fees when compared to other options available to sellers,” Amazon said in an emailed statement.

“In fact, our research shows other comparable options available to sellers are approximately 50-80% more expensive.”

The online merchant in question adds, that despite not being able to pursue an antitrust case themselves, due to agreeing to binding arbitration when starting to sell products on Amazon, they hope the Federal Trade Commission will investigate, or that a logistics company who has lost business to Amazon will file a suit.

“Amazon raised logistics fees by 20% over the last four years until they cost as much as 35% more than competing services,” the online merchant said.

“Amazon pushed us to continue using its logistics or risk being suspended from selling on its platform or seeing our products marginalised on the site.”

“Using Amazon’s service forced us to boost prices by as much as 12% on more than 100 products we’ve been selling on Amazon for years.”

According to Digital Commerce 360, Amazon controls more than 70% or all online marketplace sales in the US alone, which is more than triple its closest competitor eBay.