Amazon settled a price-fixing investigation by the Washington State attorney general’s office on Wednesday, agreeing to pay $2.25 million and end a program that gave it control over the prices of products supplied by third-party sellers on its marketplace.
The suit focused on a program that the Seattle-based company started in 2018 to let sellers use its pricing algorithm. Called Sold by Amazon, the program guaranteed sellers a minimum price while offering a potential upside if the algorithm determined that customers were willing to pay more.
The attorney general’s complaint said the algorithm had harmed consumers in part because it set the minimum price as a “floor” of what Amazon offered customers, “meaning that participating sellers had limited, if any, ability to lower the price of their products without withdrawing the product” from the program.
Glenn Kuper, an Amazon spokesman, said in a statement that the effort had been “small” and meant to “provide another tool to help sellers offer lower prices.” While Amazon is “glad to have this matter resolved,” he said, the company believes the program was legal. Amazon stopped offering Sold by Amazon in 2020 and under the agreement pledged to not offer it again.
Bob Ferguson, the state’s attorney general, 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 practices. The Federal Trade Commission has pursued an inquiry into the company and is considering whether to approve its purchase of the MGM movie studio. European regulators brought their own antitrust charges against Amazon in 2020, saying it took advantage of the small merchants that used its marketplace.
Last week, a Senate committee advanced legislation that could stop Amazon from favoring its own products over those of the other sellers on its site. The company has fought the bill aggressively, sending sellers to talk to lawmakers and claiming the legislation could force it to stop outside merchants from reaching its customers.