Washington Shuts Down “Sold By Amazon” For Illegal Price Fixing
Amazon has shut down its “Sold by Amazon” (SBA) program nationwide in response to Washington state’s antitrust enforcement action.
The SBA program enabled the company to set product prices for participating third-party sellers. When the program was launched in 2018, Amazon marketed it to sellers as “a free, opt-in service that helps selling partners save time and increase sales by automating prices so they can consistently and effortlessly offer customers great prices.”
Washington state Attorney General Bog Ferguson’s lawsuit against Amazon asserted that the SBA program violated antitrust laws as it allowed Amazon to restrain competition and maximize its own profits from third-party sales through unlawful price-fixing. This created a scenario where Amazon benefitted regardless of whether consumers paid higher prices for sales of products enrolled in the SBA program or settled for similar products offered by Amazon.
“Consumers lose when corporate giants like Amazon fix prices to increase their profits,” Ferguson said in a statement.
“Today’s action promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country.”
On Thursday, Amazon announced that it had discontinued the SBA program in 2020 due to business reasons unrelated to the legal challenges posed by the lawsuit.
“This was a small program to provide another tool to help sellers offer lower prices, much like similar programs common among other retailers, that has since been discontinued,” an Amazon spokesperson said.
“While we strongly believe the program was legal, we’re glad to have this matter resolved.”
As part of the legally enforceable consent decree, the eCommerce giant must permanently end the program and provide the Attorney General’s Office with annual updates on its compliance with antitrust laws. In addition, the company must pay $2.25 million, which will be used to support Attorney General’s antitrust enforcement efforts, which do not receive general fund support and are funded through recoveries made in other cases.