The Attorney General (AG) of Washington DC Karl Racine sued Amazon with an antitrust suit Tuesday alleging the company blocks sellers on its marketplace from offering better deals elsewhere, leading to higher prices for consumers.

This blockage by Amazon prevents sellers from selling their products at lower prices on any other website including their own resulting in Amazon controlling the prices giving it an undue advantage over others in the marketplace making Amazon a monopoly.

“Amazon wins because it controls pricing across the online retail-sales market, putting itself at an advantage over everyone else,” Racine said on a call with reporters, the Wall Street Journal reported. “These restrictions allow Amazon to build and maintain monopoly power,” Racine added, according to the report.

However, the e-commerce giant has disputed these allegations stating sellers fix their own prices on their site.

The AG has only filed the lawsuit pertaining to the violations of law under the Washington DC jurisdiction and not under the federal law. This would limit the case to a large extent compared to other antitrust lawsuits filed against Facebook Inc and Alphabet Inc wherein Racine had joined hands with multiple states. Racine has stated other states can come on board and fight it out.

Amazon in 2013 had stopped in Europe its seller policy after competition watchdog in the United Kingdom and Germany began an investigation.

In 2019, Amazon removed a policy that prohibited its sellers to sell at lower prices or with better terms anywhere else online including their own website. This was replaced with a “Fair Pricing Policy” that was an “effectively identical substitute,” according to the lawsuit filed.

The AG’s office has conducted its own investigation and reported Amazon charges fees up to 40 percent of the product price while ensuring their sellers are not allowed to offer lower prices on other websites.

Defending the new policy, Amazon says, we allow sellers to set their own prices and we monitor them constantly. If any product is sold higher in Amazon compared to other sites, Amazon may not feature the seller’s product and a warning is also issued. This new policy ensures consumers are not overcharged and it decides which offers to feature based on price, delivery speed and other factors.

(Edited by : Ajay Vaishnav)