Amazon accused of forcing up prices for independent merchants in antitrust complaint
In a letter sent to federal lawmakers, an online merchant has accused Amazon.com Inc. of forcing him and other sellers to use the company’s expensive logistics services, which in turn forces them to raise prices for consumers.
The complaint, based on an analysis of thousands of Amazon transactions over several years involving more than 100 products, turns all of that thinking on its head. It accuses Amazon of “tying” its marketplace and logistics services together, an antitrust violation in which a company uses dominance in one market to give itself an advantage in another market where it’s less established.
The accusations are potentially a significant development in various government inquiries into Amazon’s business practices. The House Judiciary Committee’s antitrust panel hosted a hearing in July during which Chairman David Cicilline grilled an Amazon attorney about its practices. As part of that investigation, the committee sent surveys to customers of big tech platforms, asking about the state of competition in digital markets and the adequacy of existing enforcement.
The allegations directly challenge Amazon’s own testimony that search algorithms determining which products are most prominently displayed are designed to best serve customers, not favor Amazon. The merchant alleges he could offer the same products on Amazon at lower prices and with faster, more reliable delivery if he could handle logistics himself without being penalized for late deliveries.
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