An antitrust case is triggered against Amazon: the attorney general of Washington DC, the District of Columbia where the capital of the United States is located, has filed an appeal against the e-commerce and Internet giant accusing it of illegal monopolistic practices, carried out with agreements halter on prices to the detriment of consumers, competition and innovation. Jeff Bezos’ giant would have maintained its monopoly through price contracts imposed on vendor companies that prohibit them from offering products at lower prices on sites other than Amazon, including those of the companies themselves.
The thrust of the prosecutor’s office
District of Columbia prosecutor Karl Racine has called for an end to similar practices, collectively referred to as “most favored nation”. He also called for damages and penalties to be identified and to act as a deterrent in the future. And he did not exclude hypotheses of so-called “structural relief”, structural interventions that can traditionally be pushed to the breakup, the spin-off of activities. “Amazon wins because it controls prices on the entire online market and ensures an advantage over everyone”, he pursued Racine. The restrictions it imposes, he added, “allow it to build and protect a monopoly power.”
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Amazon at the peak of growth
The case hits Amazon as it is at the peak of its expansion, with the business spurred by the pandemic. Not only in e-commerce: the group is also committed to rapidly closing the acquisition of the historic film company MGM, which would enhance its streaming assets, for about 9 billion dollars. For Amazon, this would be the second largest acquisition after the Whole Foods supermarket chain for over 13 billion in recent years.
La morsa antitrust su Big Tech
The antitrust grip, made up of offensives from authorities as well as rival companies or companies that consider themselves damaged, is however tightening on all the huge growing elite of Big Tech, in the United States as well as in Europe. Apple is today on trial accused by video game leader Epic Games of abusing a dominant position in its App Store, where it charges up to 30% commissions denounced as excessive by multiple developers. The trial ended this week in Silicon Valley with the parties’ final pleadings and a judge’s ruling, who seemed sensitive to antitrust concerns, could arrive in the course of the summer. Late last year, the US House also released a 400-page report denouncing the monopoly spectrum on digital markets under the control of big hi-tech brands, including Amazon.
Amazon and 40% commissions
In the new case now brought against Amazon, measures specifically preventing third party sellers on its platform from offering products at lower prices elsewhere are under attack. Such contracts, according to the prosecutor, “create an artificially high threshold on the entire online marketplace” dedicated to retail. Amazon would in fact insert commissions of up to 40% on prices, but sellers cannot avoid them by using other sites. According to the prosecution’s thesis, the final outcome would therefore be a reduction in competition, innovation and choice that weighs on both sellers and consumers.