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.
