Amazon’s most-favored nation clauses slammed in lawsuit filed by Washington, DC

Enlarge / Amazon boxes. (credit: Getty Images | Julie Clopper)

The District of Columbia sued Amazon Tuesday, alleging that the online retail giant violated antitrust law with policies that prevent sellers from offering products at lower prices on other websites.

"Amazon fixed online retail prices through contract provisions and policies" that "prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites," Attorney General Karl Racine's office said in an announcement of the lawsuit. The complaint was filed in the District of Columbia Superior Court.

Amazon's most-favored nation (MFN) agreements "effectively require third-party sellers to incorporate the high fees charged by Amazon-as much as 40 percent of the total product price-not only into the price charged to customers on Amazon's platform but also on any other online retail platform," Racine's announcement said. "As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia's Antitrust Act."

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