On Tuesday, the District of Columbia filed an antitrust lawsuit against Amazon, alleging that the tech giant has abused its e-commerce market dominance to harm competition and artificially raise retail prices across the internet.
The lawsuit filed by DC Attorney General Karl Racine targets Amazon’s (AMZN) relationships with third-party sellers, alleging that Amazon’s contracts prevent sellers from offering their products at a lower price on other websites.
Racine told reporters on a conference call that the platform fees Amazon demands of its sellers — which are passed on to Amazon shoppers — must also be baked into the prices that shoppers see on sites like Walmart’s. According to Racine, Amazon sellers are sometimes charged fees of up to 40% of the total product price on Amazon.
“These restrictions allow Amazon to build and maintain monopoly power in violation of District law,” Racine said.
The lawsuit filed on Tuesday is the latest in a long line of complaints filed by state attorneys general against large tech companies in the last year, following antitrust lawsuits filed by a number of states against Facebook and Google. However, it appears to be the first antitrust lawsuit filed by a state attorney general against Amazon. The lawsuit seeks a court order prohibiting Amazon from engaging in anticompetitive behavior, as well as any other necessary measures, including, if necessary, a corporate breakup.
The lawsuit, filed in DC Superior Court, cites an Amazon document known as the Fair Pricing Policy, which states that in response to “pricing practices that harm customer trust,” such as “setting a price on a product or service that is significantly higher than recent prices,” Amazon may remove seller listings, give them less prominent placement on Amazon’s site, or ban sellers entirely.
That language allows Amazon to “penalize a seller for selling products on non-Amazon online retail sales platforms for a better price or on better terms,” according to the complaint.
Racine “has it exactly backwards,” according to an Amazon spokesperson.
“Sellers set their own prices for the products they offer in our store,” the statement said. “Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively.”
Racine’s proposed remedy, according to Amazon, would “force Amazon to feature higher prices to customers.”
Amazon is accused of breaking DC’s antitrust laws, according to the lawsuit. It makes no claims that Amazon broke any federal antitrust laws, and Racine’s office is not currently collaborating with other federal or state officials on the case.
That could, however, change, he told CNN Business.
“It’s not unusual after a suit for other attorneys general to express an interest in the lawsuit and join or file their own,” Racine said.