Amazon ‘Price-Parity’ Agreements Have Artificially Raised Prices for Consumers, Class Action Alleges

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A proposed class action alleges Amazon has wielded coercive, anticompetitive “price-parity” agreements with third-party sellers as a way to prevent price competition online and trick consumers into believing they are getting the lowest prices possible. 

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The 39-page antitrust case claims that Amazon’s price-parity agreements prevent third-party sellers from offering products on competing websites at prices lower than those found on Amazon. These agreements, in combination with Amazon’s excessive and “unavoidable” fees, have forced sellers to raise prices across the market, the lawsuit alleges.  

Thus, Amazon “imposes artificially high prices on the entirety of the internet,” causing consumers to be overcharged while Amazon further entrenches its dominance, the suit alleges. 

“By blocking sellers from offering lower prices on other sites, Amazon ensures that the prices listed on their site appear competitive,” the complaint relays. “This keeps customers locked into their Amazon shopping habits, which, in turn, has allowed Amazon to impose higher and higher fees on sellers.” 

Amazon’s apparent monopoly power over the online retail market has also allowed it to “degrade” the services it provides to consumers, with once-relevant search results now “plastered with pay-to-play advertisements,” the case continues. The suit alleges Amazon allows less-than-useful ads to appear in its organic search results because “they are a source of billions in profits,” and because it knows “its monopoly power allows it to do so.” 

More broadly, Amazon’s “chokehold” on the online shopping sphere has allowed the company to illegally impose a price floor and “separate customers from their hard-earned money through anticompetitive and unfair means.” 

“Rather than fostering a free and competitive e-commerce economy, Amazon chose the path of quick and unfettered profits by unlawfully exercising their monopolistic powers in violation of antitrust law,” the filing charges. 

As the case tells it, Amazon is “not the cheapest website to sell products on,” as most sellers must pay the company selling fees, referral fees, fulfillment and delivery fees, and advertising fees. In order to recoup these costs, sellers naturally raise the prices of their products, and these higher prices are then reflected across the market due to Amazon’s price-parity agreements, the suit relays.  

The foregoing amounts to a cycle in which Amazon is able to keep sellers locked into a bundled service with ever-increasing prices, costs that ultimately get passed on to consumers, the complaint summarizes. 

The lawsuit looks to cover all individuals or organizations who bought a product offered for sale by an Amazon third-party seller on the Amazon Marketplace where the seller offered the product using Amazon’s fulfillment services. The case also looks to represent all individuals or organizations who bought, through any retail e-commerce channel in the U.S. other than Amazon, a product that was concurrently offered for sale by an Amazon third-party seller on the Amazon Marketplace. 

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