Amazon’s Marketplace platform for third-party sellers harms competition by penalizing merchants who sell products on other platforms for lower prices than they offer on Amazon.com, two new class-action antitrust suits against the commerce giant contend.
The suits, lodged Wednesday in federal court in Seattle on behalf of proposed classes of tens of millions of consumers who have bought merchandise on Amazon.com, describe Marketplace as a pay-to-play scheme in which Amazon is the only winner.
Earlier this week, Washington, D.C., attorney general Karl Racine lobbed an antitrust suit against Amazon also focused on its Marketplace pricing restrictions. Attorneys general from five states — including Washington — and the Federal Trade Commission are exploring antitrust cases against the retail behemoth.
Amazon did not immediately respond to questions about the lawsuits. It has previously rebutted claims that its Marketplace policies raise prices.
Plaintiffs in the two new suits are represented by Hagens Berman, the Seattle firm that previously filed class-action antitrust cases against Amazon’s bookselling division, and attorneys in the Seattle office of Quinn Emanuel Urquhart & Sullivan.
Amazon raises prices for consumers by taking action against sellers that offer goods at a lower price elsewhere, suspending their accounts or making it harder for buyers to find their products, the suits contend.
Between payments for logistics services and other fees, Amazon earns an average of 27% of the selling price on every transaction on its platform, according to research firm Instinet. Many sellers pay Amazon even more to boost the visibility of their listings. Together, those fees — which are higher than on competing platforms, like Walmart or Ebay — inflate the price of goods sold on Amazon’s Marketplace, the lawsuits assert.
Amazon’s control of as much as 70% of the ecommerce marketplace in the U.S. means that vendors cannot avoid selling on Amazon.com, according to the suits. The company’s high transaction fees also batter vendors’ profit margins, the suits add.
Sales on Marketplace likely generate nearly $120 billion in revenue for Amazon each year, one Marketplace consultant and former Amazon executive has estimated. Amazon does not share revenue figures for Marketplace.
Plaintiffs’ attorneys are asking the court to rule that Amazon violated antitrust law and award monetary damages.