Amazon's "price fixing" program for its third-party sellers is now shutting down completely after the attorney general or AG of Washington found it to be illegal or unlawful.
Amazon's 'Price Fixing' Program Shuts Down
As per a news story by Geek Wire, the e-commerce tech giant co-founded by Jeff Bezos will now be paying a hefty $2.2 million to settle the case with the Washington State AG, Bob Ferguson.
The complaint specifically involved the discontinued program of the tech giant that goes by the name "Sold by Amazon," shortly known as SBA.
The said seller program of Amazon for its third-party sellers lets that latter give the tech giant control over the prices of their products.
The program then gives the third-party sellers a "minimum gross proceeds," which gives them a guaranteed return even if Amazon sells their products at a lower price tag.
The attorney general of Washington further alleges that the Amazon seller program "fixed, raised, maintained, or stabilized" the prices of the products "at artificially high levels" by performing price increase and discount prevention and setting price floors.
As such, Washington AG said that customers of the e-commerce platform have to pay more for these products.
On the other hand, the spokesperson of Amazon said in a statement that the SBA program was just a small project that seeks to "help sellers offer lower prices, much like similar programs common among other retailers."
On top of that, the Amazon spokesperson further added that the tech giant believes that the program is legal. Nevertheless, they are pleased that it has already been resolved.
According to a report by Engadget, the seller program of Amazon was available from 2018 up until June 2020.
Sold by Amazon Program vs. Washington Attorney General
Meanwhile, the probe regarding the Sold By Amazon program began in March 2020. However, the tech giant clarified that its discontinuation three months after the investigation started has nothing to do with it.
Since then, the Attorney General of the state found it to be "constituted unlawful price-fixing."
The Washington AG went on to point out that the problem with the seller program comes with the ability of Amazon to set the price floor of the product based on the minimum price.
As such, some consumers opted out to look for other cheaper alternatives from Amazon and its other brands, which according to the Attorney General, violates the antitrust laws.
That said, Amazon has agreed to stop offering the Sold By Amazon program in the future, shutting down the service altogether.
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Written by Teejay Boris
