Amazon on Wednesday settled a price-fixing investigation by the Washington State Attorney General’s Office, agreeing to pay $ 2.25 million and terminate a program that gave it control over the prices of products supplied by third-party vendors in its marketplace.
The suit focuses on a program the Seattle-based company launched in 2018 to allow vendors to use its pricing algorithm. Sold by Amazon, the program guarantees sellers a minimum price while the algorithm determines whether customers are willing to pay more.
The attorney general’s complaint states that the algorithm harms consumers in part because it sets the minimum price as the “floor” of what Amazon offers to customers, meaning that participating sellers have limited ability to reduce the price of their product, if any. If so, without withdrawing the product “from the program.
Glenn Cooper, an Amazon and Effort, said in a statement that it was “small” and meant “providing another tool to help sellers offer lower prices.” While Amazon is “happy to resolve this issue,” he said, the company believes the program was legitimate. Amazon closed the offer, which was sold by Amazon in 2020, and promised not to offer it again under the agreement.
State Attorney General Bob Ferguson said in a statement announcing the settlement that it “promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country.”
Amazon is facing intense pressure in the United States and abroad over its business practice. The Federal Trade Commission is investigating the company and is considering approving the purchase of MGM Movie Studios. European regulators filed their own no-confidence charges against Amazon in 2020, saying it took advantage of small businesses using its marketplace.
Last week, a Senate committee passed an advanced law that could prevent Amazon from favoring its own products over other vendors on its site. The company has been fighting the bill aggressively, sending vendors to talk to legislators and claiming that the law could force it to stop outside traders from reaching its customers.