Washington, D.C., Attorney General Karl Racine announced Tuesday he’s suing Amazon on antitrust grounds, alleging the company’s practices have unfairly raised prices for consumers and suppressed innovation.
Racine is seeking to end what he alleges is Amazon’s illegal use of price agreements to edge out competition; the lawsuit also asks for damages and penalties to deter similar conduct. The suit asks the court to stop what it calls Amazon’s ability to harm competition through a variety of remedies as needed, which could include structural relief, often referred to as a form of breakup.
Shares of Amazon barely moved on the announcement, down 1% as of Tuesday afternoon.
The lawsuit, filed in D.C. Superior Court, alleges Amazon illegally maintained monopoly power by using contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms. The attorney general’s office claimed the contracts create “an artificially high price floor across the online retail marketplace,” according to a press release. The AG claimed these agreements ultimately harm both consumers and third-party sellers by reducing competition, innovation and choice.