States to Investigate Amazon Third-Party Vendor Practices

On June 12, the New York Times and the Washington Post reported that state investigators in Washington and California were inspecting Amazon’s business practices, focusing on how the company behaves towards third-party vendors. Sellers have allegedly experienced difficulty listing their products on Amazon’s website. It is one among several companies under investigation for anticompetitive behavior.

According to Reuters, “The reports said California state is reviewing Amazon’s practices on selling its own products in competition with third-party vendors. Amazon said its in-house products only account for about 1% of its total annual retail sales.” As reported by the New York Times, Washington state started an investigation into whether Amazon “makes it harder for sellers to list their products on other websites.” However, a representative for the Washington attorney general claimed that “the office did not confirm or deny investigations.”

State attorneys general have recently given more scrutiny to anti-competitive behavior by Amazon and other companies like Google and Facebook. The New York Times reported increasing national investigative efforts against large companies, saying, “Texas is leading a multistate inquiry of Google and its sprawling business, while New York has helmed an investigation into Facebook.”

Last month, Amazon CEO Jeff Bezos was asked by the U.S. House of Representatives Judiciary Committee to “testify about allegations that Amazon uses data from its own third-party sellers to create competing products.” The company also faces investigations by the European Commission after traders claimed it functions as both a “marketplace and as a rival.” 

Amazon has also been sued by customers for allegedly penalizing third-party vendors who listed their products on other websites, thereby behaving anti-competitively. Contrarily, third-parties have also been sued for deceptive sales practices on Amazon.