Amazon Antitrust Risk Deepens as More State AGs Weigh Action (1)

Attorneys general from Massachusetts and Pennsylvania have joined the list of officials looking at Amazon.com Inc. for potential antitrust violations, which already included California, New York, Washington state and the Federal Trade Commission, according to people familiar with the matter.

The mounting state inquiries, including a lawsuit filed by Washington, D.C., on Tuesday, suggest that the e-commerce giant will be fighting a multi-front legal war in the months ahead.

Massachusetts and Pennsylvania officials are talking with fellow AGs in New York and California about how to split up the work, people familiar said. The attorney general’s office in Amazon’s home state of Washington has had some collaboration with California, said the people.

The ultimate aim is to build a viable antitrust case against the world’s largest online retailer, said one of the people, who requested anonymity because the probes aren’t public. Connecticut’s attorney general has also recently begun to examine Amazon’s business practices, one of the people said.

The shares fell 0.9% in pre-market trading and were little changed at 11:15 a.m. in New York.

Amazon has been accused of using its market power to crush rivals and vie for business against third-party merchants who pay to sell through its platform, among other allegedly anticompetitive behavior.

Attorneys general in Connecticut, Massachusetts and Pennsylvania declined to comment.

WATCH: The antitrust case against Amazon.

Source: Bloomberg

An Amazon spokesman declined to comment about additional states reviewing the company’s practices and pointed to a previous statement, saying “the presumption that success can only be the result of anti-competitive behavior is simply wrong.”

Bloomberg reported last year that the New York and California attorneys general were teaming up with the U.S. FTC to investigate Amazon’s online marketplace. Cooperation among state and federal regulators can often precede a big antitrust enforcement action, as happened in the case against Microsoft Corp. more than 20 years ago.

D.C. Attorney General Karl Racine on Tuesday accused Amazon of engaging in anticompetitive practices that have raised prices for consumers. He filed the case on his own, rather than teaming up with other states. Racine said he didn’t know whether other states would join and said he hasn’t coordinated with the FTC.

Amazon’s policies governing third-party sellers prohibit them from offering products at lower prices on rival platforms, which has led to artificially high prices for consumers and let the company build monopoly power, Racine said. In an interview Tuesday with Bloomberg TV’s Emily Chang, Racine said states are investigating other aspects of Amazon’s business.

“I know that there are several other issues that attorneys general like D.C. are looking at with respect to the platforms including Amazon,” he said.

Amazon merchants and their consultants in 2019 told Bloomberg that Amazon’s practices forced them to raise prices on other sites such as Walmart Inc. If Amazon detected lower prices on other sites, it would bury their products in Amazon search results, where they got most of their sales. Some of the merchants were eager to grow their sales on other sites, but Amazon’s policies prevented them from offering lower prices elsewhere to lure shoppers away.

Read more: Bezos Says Retail Is Much More Competitive Than Phone Market

(Updates with shares.)

--With assistance from Sara Forden, Erik Larson and David McLaughlin.

To contact the reporter on this story:
Spencer Soper in Seattle at ssoper@bloomberg.net

To contact the editors responsible for this story:
Robin Ajello at rajello@bloomberg.net

Jillian Ward, Andrew Pollack

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