One of Amazon's seller programs has been found to be unlawful

Amazon has agreed to pay the office of Washington State's attorney general's office $2.25 million and provide yearly updates on its compliance with antitrust laws, following an investigation into its Sold By Amazon program. The program set a pricing floor for certain products, which the Attorney General's office says constituted a price-fixing.

The program was available to a small number of third-party sellers. If sellers agreed not to compete with the company, they would earn a guaranteed minimum on their products. Merchants could earn additional revenue if Amazon determined consumers were willing to pay more for their product, with the company splitting the difference between them.

The problem with the system was that it set the minimum price of a product as the floor of what Amazon would offer, according to Ferguson. Some sellers saw a decrease in sales when the price of their goods increased, because some consumers would opt to buy similar but more affordable products from Amazon and its various private labels. The program was in violation of antitrust laws according to the AG.

In March 2020, the state opened a probe into Sold By Amazon. In June of that year, the program was discontinued for reasons unrelated to the attorney general's investigation, according to an Amazon spokesman. As part of its agreement with the state, the company won't offer the Sold By Amazon program again.

The company said that the program was a small one to help sellers offer lower prices, similar to programs common among other retailers.

Amazon has faced intense scrutiny over how it operates its online marketplace. The Wall Street Journal reported in 2020 that the company had been using proprietary seller data to help design and price its in-house products. Jeff Bezos, the former CEO of Amazon, told the Senate that the company had not mishandled data from third-party merchants. The American Innovation and Choice Online Act was advanced by the Senate Judiciary Committee last week. The company has fought to prevent the bill from passing.