Puerto Rico joins lawsuit against Amazon for alleged practices affecting sellers and consumers

Will be part of the lawsuit filed by Puerto Rico federal trade commission (FTC) and 17 other jurisdictions usa against sales portal AmazonTo understand how this company’s practices affect the vendors it uses and, as a result, consumers.

He Justice Department, through the Office of Antitrust Affairs, joined the lawsuit Thursday night. On the other hand, he pointed out that consumers here would benefit from the ruling in the case against Google, of which Puerto Rico was a part.

“The lawsuit alleges that Amazon has employed illegal tactics to maintain its monopoly power in its markets,” said Guarionex Diaz Martínez, Assistant Secretary of the Office of Antitrust Affairs.

He pointed out that the lawsuit accuses Amazon of engaging in illegal and anti-competitive practices by setting special requirements for its sellers.

For example, prosecutors said, Amazon prevents its sellers from offering cheaper prices on other platforms, which prevents consumers from getting a better deal.

As he explained, earlier platforms included explicit prohibitions in contracts with sellers, but as of 2019 the techniques are more sophisticated.

“Amazon started penalizing these sellers. “They set up constant monitoring on the Internet and when they identified that a seller was selling the same product at a lower price on another platform, they started punishing him and thus daring sellers to sell at a lower price on another platform. Succeeded in stopping it from happening. Platform.”, That said, this shows that if Amazon finds sellers are selling cheaper elsewhere they could be removed from the platform.

However, Justice has no records of how many people from Puerto Rico sell products on Amazon. company portal SmartScout It is estimated that there are 134 people selling on Amazon and the sales are reaching $200 per seller. For fiscal year 2023 – through February – the Treasury Department reported $142.4 million in sales and use taxes (IVU) that are collected for all sales made online.

Diaz Martínez reveals another fine sellers will receive from Amazon Their products are not displayed with buttons that facilitate purchasing. As stated, it has already been argued in the lawsuit Amazon does not place products in its search options in an “organic” manner but gives priority to sponsored products.

“These products (sold on other portals) are placed much lower in the search results. Today, search results are not organic, but are generated from sponsored products,” he said. “Once consumers search, these products will be far down the list, making them invisible.”

Another questionable practice is to identify the prices that products are at on other platforms and then sell it at the highest price available and maintain that price on the platform. This leads to artificial increase in prices which hurts consumers.

“These are the practices that are being alleged in the lawsuit,” the prosecutor said. “Amazon engages in these practices and has degraded the quality of its services, primarily in search results. Another thing it has done is skyrocketed the fees charged to sellers, especially in “fulfillment” services, which have increased by 30% between 2020 and 2022.

According to him, this increases the price of products sold on this platform.

He said, “Puerto Rico takes an active stand in this lawsuit because Amazon’s actions affect businesses in Puerto Rico, Puerto Rico consumers, and the government of Puerto Rico.”

The lawsuit demands the internet sales giant to stop these practices.

Puerto Rico was also part of the case against another giant company, this time in the technology sector: Google. The company agreed to pay $700 million as a settlement of the antitrust lawsuit and make changes to its Android app download platform, Google Play.

Attorney Juan Carlos Arce, a lawyer for the Justice Department’s office of antitrust cases, said that still It has not been determined what the distribution will be for each state participating in the lawsuit.

“The Attorney General reached a $700 million settlement with Google. Of that figure, 90% or $630 million, less costs and fees, will be awarded to eligible consumers who made purchases (on Google Play) between August 16, 2016 and September 30, 2023 and were harmed by these practices. In addition, there is a provision of $70 million for the Multi-Sector Coalition for Fines. The settlement includes an injunctive remedy and requires Google to take measures to make its practices more competitive.”

It is still unknown how much of this money will go to users of these platforms in Puerto Rico.

On your behalf, the Secretary of the Department of Justice, domingo emanueli hernandez “We have discovered unpaved civilian areas in Puerto Rico and that is our goal to protect consumers and businesses,” he said.

“We have participated in litigation across the United States, representing over $300 million to the Treasury in cases won or settled. We have been involved in many lawsuits. “These are two lawsuits against two big companies,” he said. “They are lawsuits that demonstrate the abuse of the market controlled by these two companies, causing extreme harm to both consumers and businesses.”