{"id":8171,"date":"2022-01-31T17:19:54","date_gmt":"2022-01-31T17:19:54","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/31\/sold-by-amazon-shut-down-after-washington-state-investigation\/"},"modified":"2022-01-31T17:19:54","modified_gmt":"2022-01-31T17:19:54","slug":"sold-by-amazon-shut-down-after-washington-state-investigation","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/31\/sold-by-amazon-shut-down-after-washington-state-investigation\/","title":{"rendered":"Sold by Amazon Shut Down After Washington State Investigation"},"content":{"rendered":"

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(Photo: Christian Wiediger\/Unsplash)<\/small><\/center>Washington state\u2019s Office of the Attorney General has announced that Amazon will be forced to shut down its Sold by Amazon (SBA) program. The decree comes nearly two years after Attorney General Bob Ferguson launched an antitrust investigation into Amazon\u2019s use of the program.<\/span><\/p>\n

SBA didn\u2019t exactly enjoy a long run. Started in 2018, the program supposedly helped eligible third-party sellers by automatically adjusting those sellers\u2019 prices in accordance with real-time competition and demand. If a participating seller\u2019s product was normally listed for $20 but Amazon\u2019s algorithms found that the same product was selling for $15 on other websites, Amazon would lower the price to help the product sell. Amazon would then issue the seller their minimum gross proceed (MGP) to ensure the seller still received a payout that would ultimately support their business.\u00a0<\/span><\/p>\n

Proponents of SBA thought the program would please customers and sellers alike, with savings for the former and increased opportunity to fulfill a potential sale for the latter. After all, the ability for sellers to pre-select an MGP would prevent them from facing significant financial loss. Skeptics, however, worried the program would be wielded as a loss leader to protect Amazon\u2019s status as a default option for shoppers. Washington Attorney General Bob Ferguson asserts this is exactly what happened.<\/span><\/p>\n

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(Photo: Andrew Stickelman\/Unsplash)<\/p>\n<\/div>\n

According to the lawsuit Ferguson filed Wednesday, Amazon exclusively extended program invitations to third-party sellers already \u201cresponsible for the vast majority of worldwide sales\u201d on the Amazon website. By entering into an agreement that guaranteed the seller would receive their MGP, Amazon prevented those sellers from setting their own prices (or even enacting temporary discounts), which in turn kept those third parties from competing with Amazon itself. Ferguson\u2019s investigation found that this also led customers to purchase Amazon\u2019s <\/span>private label<\/span><\/a> products, benefitting Amazon while cutting away potential customers for the very third-party sellers the program claimed to support.\u00a0<\/span><\/p>\n

\u201cSBA contracts were entered for the purpose of, and did, artificially raise, stabilize, and maintain online retail prices to consumers within Washington State and the United States,\u201d the <\/span>lawsuit<\/span><\/a> reads. Ferguson\u2019s filing goes on to describe SBA agreements as \u201cinjurious to the public interest\u201d and having \u201cunreasonably restrained trade or e-commerce,\u201d as they inherently involved price-fixing between horizontal competitors.<\/span><\/p>\n

The lawsuit is joined by a <\/span>consent decree<\/span><\/a> indicating a settlement between the Office of the Attorney General and Amazon: Amazon be required to halt the SBA program and pay a $2.25 million fine. The decree also forbids Amazon from ever creating a \u201cnew,\u201d differently-named program with the SBA\u2019s terms and conditions.<\/span><\/p>\n

Fulfilling the terms outlined in the consent decree won\u2019t be particularly difficult, given that Amazon suspended its use of SBA in June 2020, just three months after Ferguson announced his office would be investigating the program. The company says it pumped the brakes on SBA for reasons unrelated to legal scrutiny, though it hasn\u2019t really said what the real reason was, either. Not that it matters\u2014SBA won\u2019t be making a comeback regardless.<\/span><\/p>\n

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