Amazon will soon shutter the “Sold by Amazon” program which ensured buyers had access to low-priced products. The online retail giant has taken the decision to cease the program after an investigation by Washington state"s attorney general ruled it was anticompetitive and violated antitrust laws.
“Sold by Amazon” was active from 2018 to 2020. Amazon claims the company merely acted as the retailer and purchased products from suppliers to fill customer orders. This ensured consumers had access to products that were aggressively priced. Amazon still claims it was running a small program offering another tool to businesses.
The lawsuit, however, argued that the program didn’t include all of the third-party sellers on the e-commerce platform. “Through the program, third-party sellers entered into an agreement with Amazon that set a minimum payment rate for products sold on the platform. If the sales exceeded the agreed-upon minimum, Amazon would take a cut of the additional revenue,” mentioned the lawsuit.
The program obviously boosted Amazon’s sales. However, it also ensured that Amazon didn’t have to compete with third-party sellers, argued Washington Attorney General Bob Ferguson:
“Consumers lose when corporate giants like Amazon fix prices to increase their profits.”
An investigation by Washington state’s attorney general has reportedly concluded that Sold by Amazon was anticompetitive and violated antitrust laws. As a result of the investigation, Amazon will shut down the program nationwide, and pay $2.25 million to the attorney general’s office. Additionally, Amazon will have to provide annual updates on its compliance with antitrust laws. The fine collected will go towards the enforcement of antitrust laws.