| A new D.C. antitrust lawsuit against Amazon escalates pressure on Washington to take on the e-commerce giant. D.C. Attorney General Karl A. Racine yesterday brought a lawsuit against Amazon, which alleged its abusing what it argues is monopoly power leading to higher prices for consumers, as Rachel Lerman and I reported yesterday. Racine accused the company of fixing prices through the terms and agreements it has with third-party sellers. The suit alleges that Amazon prevents them from selling their products at lower prices on any other online platforms, leading to "artificially high" prices across the Internet. (Amazon founder Jeff Bezos owns The Washington Post.) "Amazon has used its dominant position in the online retail market to win at all costs," Racine (D) said in a statement. Amazon pushed back against the lawsuit's claims, saying in a statement that the suit would force the company to feature higher prices. Amazon spokesman Jack Evans said that Racine had "it exactly backward" in a statement. Karl Racine, District of Columbia attorney general, speaks during a news conference. (Andrew Harrer/Bloomberg) | Yet the company's critics cheered on Racine, and called for this suit to be just the beginning of action against Amazon. Racine's narrow suit against Amazon focuses on just one of many ways that consumer advocates say the company has stifled competition and abused its power. And he decided to bring it in D.C. Superior Court under D.C. antitrust laws, rather than coordinating with other state attorneys general or federal regulators. But it is possible that it could inspire more antitrust enforcers to bring similar complaints or others against the company. "If the case is successful, it would be an indication that other states, federal enforcers, or even private companies would also be likely to be successful on a similar legal theory, so that would be an additional pressure on Amazon to fix their policies across the country," Charlotte Slaiman, the competition policy director at the consumer group Public Knowledge, told me. Amazon has been under the regulatory spotlight, but so far has not faced the same level of legal action from the federal government as tech rivals Facebook and Google, which are both the targets of federal antitrust lawsuits. The Federal Trade Commission has been probing Amazon for almost two years, but it has yet to bring an antitrust suit against the company. Meanwhile, federal and state regulators have brought cases against Facebook and Google. Slaiman says the D.C. suit could add pressure on the agency to do so. As this case moves forward, it might also uncover evidence that could be useful to other regulators aiming to bring antitrust action against the company. However, most of Amazon's critics don't want to wait for a lengthy antitrust legal battle to see changes at the company. Antitrust cases against well-resourced tech companies typically take years to conclude, and critics of the company's competitive practices said Congress needs to act swiftly to address monopoly concerns at Amazon and other companies. "This suit also comes as momentum to break the extraordinary and dangerous power of Big Tech reaches new heights," said Sarah Miller, executive director of the American Economic Liberties Project. Stacy Mitchell, co-director of the Institute for Local Self-Reliance and a top critic of Amazon, said Congress needs to pass legislation to address the company's dominance. She said far more drastic action is needed from regulators. "To have a truly competitive e-commerce market, you have to break up Amazon," she said. "There's a fundamental conflict of interest when you own the infrastructure and you also compete on that infrastructure." State attorneys general are playing a critical role in tech's antitrust reckoning. Last year, groups of state attorneys general brought two antitrust lawsuits challenging Google's dominance in search and advertising. A separate group of 48 attorneys general filed a landmark antitrust suit against Facebook, seeking to break up the social networking giant. |
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