Amazon currently has 2 major antitrust lawsuits against it pending in the US, both of them alleging its practices raise prices everywhere online. One was filed by the US Federal Trade Commission (FTC) and 17 state attorneys general, and the other was filed by California. Let’s dig in.
Alleged Antitrust Violations Raise Prices at Amazon & Elsewhere
The US government accuses Amazon of the following major antitrust violations: illegally maintaining monopoly power, raising prices across the economy, and punishing merchants who offer lower prices elsewhere. Specific allegations against Amazon include:
- Retaliating against sellers and brands who list cheaper prices on other platforms;
- Forcing merchants to use Amazon’s expensive logistics services (that take up to 50% of sales); and
- Using “most favored nation” clauses to artificially inflate prices everywhere on the internet
To understand these allegations, we need to understand that Amazon.com has two main customer bases. One is the the customer base that you’re familiar with: you. Most people think they are the customers for Amazon, and that they hold the power as customers. Nope. Not even close. In some ways, your purchases from Amazon.com are simply a way for Amazon to dodge taxes. More on that later.
The other main customer base Amazon.com has is the company is that sells on Amazon.com. And there are a lot of them. Because Amazon.com has the largest market share on the internet. So not being on Amazon.com is a major disadvantage for a merchant.
But it costs sellers to appear on Amazon.com. A lot. Amazon makes kaboodles of money from the merchants that you buy stuff from. It’s all invisible to you, but Amazon is a middleman skimming off the top of each and every transaction on the site.
With that background, let’s take a look at what goes on behind the scenes of the biggest online store in the Western world.
Allegation: Amazon Retaliates Against Sellers
To understand how Amazon retaliates against sellers who list cheaper prices anywhere else online, we first have to understand how much leverage Amazon has over its sellers and things it is willing to do to sellers.
Amazon can and does suspend sellers routinely over things like an allegation that the seller is not authorized by a brand to sell particular products. Sounds good, right? Keeping the brand happy. Wouldn’t want to find counterfeit goods on Amazon, right?
Oh there are plenty of counterfeit goods for sale on Amazon. But Amazon can suspend any seller on suspicion and then reject evidence of brand authorization. Because it feels like it. Because it wants to. Because it wants to kick the seller off the platform.
Because its ‘investigation’ process is subject to ‘privacy’ restrictions that just so happen to prevent the seller from knowing exactly what it’s being accused of. To say Amazon is capricious in its actions toward sellers is a severe understatement.
But there’s more. While Amazon is ‘investigating’ a seller, it withholds proceeds of sales from them WHILE charging them ongoing monthly fees. If the seller uses Fulfillment by Amazon (which sellers are pressured to do), Amazon can lock access to their inventory. Or LITERALLY DESTROY A SELLER’S INVENTORY. Amazon has caused sellers millions of dollars of losses. Because it can.
And all of this is AFTER the predatory fees Amazon charges sellers at every conceivable step of the process of selling on Amazon.
Since Amazon wields this ability to suspend sellers and cause them enormous financial losses for no known reason, sellers have every reason to be wary when Amazon detects a possible lower price anywhere on the internet.
Seller Lowers Prices Elsewhere – Amazon Makes them Disappear From Its Listings
What Amazon typically does to retaliate against sellers for ‘pricing violations’ is push them down the search results ranking so customers can’t find their products and prevent so-called ‘Buy Boxes’ from appearing on their product listings. In other words, Amazon makes it hard for customers to find or buy the seller’s products on Amazon. That’s if Amazon doesn’t remove products or the seller’s account altogether.
From a seller’s point of view, this means Amazon has a financial guillotine waiting for sellers who run afoul of its price-fixing schemes. Behind the scenes, sellers CANNOT LOWER PRICES ANYWHERE ON THE INTERNET BELOW WHAT AMAZON LETS THEM SELL FOR.
Forcing Merchants to Pay Amazon’s High Fees
Next, let’s take a look at Amazon’s fees for merchants:
- Amazon typically charges 15% of the sale price of an item. This charge is referred to as ‘rent’ or a ‘referral’ fee. Some items have a referral fee as low as 8%, while some have a fee as high as 45%. But the most typical fee is 15%.
- Amazon charges as high as 35% of sale price for ‘logistics’ or Fulfillment by Amazon. Logistics fees have been rising steadily, including in 2026 with a host of new fees including a ‘fuel surcharge’ presumably thanks to the war in Iran. These two fees alone can consume as much as 50% of a seller’s sale price.
- Ad fees. This is where Amazon really has a grip on sellers. If a merchant does not pay advertising fees, the merchant’s products essentially become invisible in the search results. Amazon has so many products and so many merchants that it takes very little algorithmic effort to bury a seller who doesn’t pony up for ads. Sellers typically pay around 15% of gross sales simply to remain visible to customers.
- Bonus Junk Fees. For some sellers, Amazon is already taking more than 50% of sales, but wait, there’s more! Amazon also charges sellers storage fees, low inventory fees, inbound placement fees, and return processing fees. By this point, Amazon fees can reach 70% of the sale price!
It wasn’t always this bad. In the 2010s, Amazon’s fees might only reach 35% of an item’s sale price. Why the big squeeze on sellers? Well…after the pandemic, consumers didn’t buy as much, and with inflation still rampant, they’re still not buying as much. So Amazon is essentially replacing consumer revenue with seller revenue.
how does Amazon get sellers to pay all these fees?
By:
- Restricting ‘Buy Boxes’ to merchants who use Amazon’s logistics services. Buy Boxes are the prime sources of revenue on Amazon.
- Giving the ‘Prime’ badge to sellers who use Amazon logistics. Prime eligibility is another major driver of sales for merchants.
- Penalizing merchants who use other fulfillment services by alleging they violate Amazon standards.
- Using search algorithms that steer buyers away from merchants that don’t use Amazon logistics.
But can’t merchants just not sell on Amazon and not pay all those fees?
Yes, and more and more are doing so. If sellers work together, Amazon could be vulnerable. But the math is brutal for individual online sellers. Amazon is gigantic. It sells 600 million different items worldwide. Not having products on Amazon cuts sellers out of the single largest source of sales on the Internet.
Not the only source, but the largest. To wit: In 2021, Washington D.C. filed a complaint against Amazon that said that “sixty-six percent of consumers start their search for new products on Amazon, and a staggering 74 percent go directly to Amazon when they are ready to buy a specific product.” The numbers were even higher in 2025.
Most Favored nation (MFN) Clauses: How Amazon Raises Prices
Most Favored Nation clauses are used in contracts to require someone to give preferential treatment to a business or no less than the best deal anyone else gets. Amazon dropped ‘most favored nation’ clauses from its contracts when regulators zeroed in on the monopolistic language but kept the meaning while enacting a name change: “Fair Pricing Policy.”
Here’s what that means. Nobody can sell anything online for a lower price than it appears on Amazon. As noted above, Amazon charges an arm, a leg, and several ribs to sell on Amazon. Other places don’t. So a merchant could legitimately lower prices everywhere else and make money, reflecting the lower overhead. That is exactly how capitalism is supposed to work.
Amazon doesn’t like how capitalism is supposed to work because true capitalism entails competition, and competition would not allow Amazon to extort ever increasing amounts of revenue from everyone else on the planet. So…
Merchants have to raise prices everywhere to cover Amazon’s high fees. Or accept razor-thin margins on Amazon to remain competitive. Guess whose prices get raised everywhere? Yours.
How do we know? Because for a brief time, Amazon couldn’t figure out how to force those MFN clauses on its sellers. And guess what happened? Lower prices on sites like eBay.
Let’s put it another way. Virtually everyone in the United States who ever buys anything online could benefit if the FTC can force Amazon to quit this one onerous practice. MFNs literally prevent the price competition that is supposed to be a cornerstone of capitalism.
Amazon Says Tide Must Raises Prices at Walmart or Pay Up
Let’s look at an example:
That’s right, brands HAVE TO GUARANTEE AMAZON’S PROFIT MARGIN!
That’s more like extortion than capitalism.
Or to elaborate in antitrust lawyer talk: “Another piece of conduct is Amazon’s algorithm that matches Amazon’s prices to the prices of retail competitors with the goal of disincentivizing price competition and promoting collusive high prices.”
“Collusive” is a major antitrust word that basically means: ‘oh you are definitely breaking the law now.’
So right now, in a time of inflation and the lowest consumer sentiment in 50 years, Amazon has effectively established an artificially high price floor for up to 600 million unique items sold online.
Of course, amazon lies about the effect of its policies on Prices
Amazon will be happy to state in print that their practices that raise prices everywhere actually lower them. Because what’s the point of making a statement at all if you’re not going to lie to make yourself look better than you actually are.
But wait, how can Amazon enforce the price-inflating MFN policies that aren’t called MFN policies anymore? Simple – it can kick a vendor off the site if they charge less on let’s say their own website.
In other words, the federal case against Amazon is pretty cut and dry. That doesn’t mean the FTC and the 17 states will prevail though. Because, as we saw in the previous post – the US has been extremely reluctant to actually enforce antitrust laws since Jimmy Carter was president. Which was waaaaaay before there was even an internet.
California’s Anti-Trust Suit Against Amazon
California’s antitrust suit was actually filed before the FTC’s because well, because California is a leader. California filed its suit in 2022, and the FTC filed what was essentially a copy of the California suit in 2023. Here’s what California’s attorney general said four years ago:
Here’s the thing: more than half of the US population has a Prime membership with Amazon. Those Prime fees right there are a big source of revenue for Amazon. But those memberships also lock buyers into the site because Prime members go to Amazon first. In reality, most online shoppers go to Amazon first.
The net result is that even huge brands know that they HAVE to be able to sell on Amazon.com if they want to sell to the US market. Sellers know they have to get squeezed by Amazon or get out of e-commerce altogether, at least in the US. Sellers getting squeezed means Amazon consumers, that half of the population with a Prime membership gets squeezed too.
There’s an old saying: “There’s no such thing as a free lunch.” Today’s saying should be: There’s no such thing as free shipping. Every benefit you think you get from forking over the dollars to Amazon via membership fees, autoship, and 1-off purchases – you are paying for. Every day. Everywhere.
So What Can You Do if You’re Realizing it’s time to Get Pretty Fed up With Amazon?
Well, of course you can boycott Amazon. That’s what the title of the post says. But the title says ‘boycott’ because that’s the primary thing people think of when it comes to companies.
But a boycott is not the only thing you can do and boycotting by itself isn’t likely to have much effect on Amazon. Other things you can do besides canceling that Prime membership include:
- This should be obvious, but if you’re a publisher don’t become an Amazon Associate (affiliate)
- Boycott Amazon’s other businesses such as Whole Foods, Twitch, Amazon Studios (streaming services), Ring and Blink, Alexa, Kindle, etc.
- Amazon’s most profitable business isn’t consumer-facing, it’s Amazon Web Services, known as AWS. AWS is the number one provider of cloud services globally. PRESSURE YOUR EMPLOYER TO STOP USING AWS. This will annoy the heck out of your employer and may not be possible for them as businesses are often locked into multi-year contracts with minimum guaranteed spend. But banding together with fellow employees who are willing to be annoying can accomplish something far more valuable: create a ruckus and publicity.
- Pressure your elected representatives to prioritize antitrust enforcement. Antitrust enforcement is hands-down one of the single most important things to level the playing field for consumers and small businesses. Agitate for antitrust enforcement!
Complain Relentlessly About Your Prices Being Higher Because of Amazon
- Letters to editors, comments on websites, posts on social media, whining to friends and neighbors, gossiping with family.
- Harass your local newspaper or television station consumer advocate or morning show or whatever to investigate whether Amazon’s practices are raising your prices. Ask for a segment. Do the same thing with trade publications in your industry if applicable.
- If you’re a small business owner or know one well, get some coverage on the challenges you face due to lack of antitrust enforcement against places like Amazon. You don’t have to put a target on your back (we’ve already seen how vindictive and deceitful Amazon can be). You can be general, lightly using Amazon as a hypothetical example or whatever. But bring attention to the problem.
- Every time Bezos gets mentioned somewhere talking about how there shouldn’t be taxes on him, comment on how Amazon has raised prices on Americans everywhere.
BOTTOM LINE: AMAZON HATES BAD PUBLICITY.
It’s not about right or wrong with Amazon, it’s about hating negative attention. So give Amazon the negative attention it deserves. Share this post. Get the word out.
The worst thing that could happen would be that your prices for a gajillion consumer products would go down.
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