An online merchant sent a letter to federal lawmakers accusing Amazon.com of forcing not only
him but also other sellers on Amazon to use the company's logistics services, which are more
expensive, leading to sellers having to increase prices of commodities they offer to their
consumers. The accusation document reviewed by Bloomberg outlines an antitrust case that
focuses on the harm caused to the consumers due to Amazon's practices. According to antitrust
experts, amazon is immune to such an accusation, and therefore, regulators ought to come up
with a way to manage Amazon's increasingly growing power on the market.

The complaint file is claimed to be based on an analysis of Amazon's thousands of transactions
involving more than 100 different products. The accusation says that Amazon is working
towards tying its market place together with its logistics services, which is viewed as antitrust
wrongdoing where the company utilizes the dominance on one market to gain dominance on the
other where it is less dominant. The letter is written with reference to the 1984 Supreme Court
ruling that states that "The essential characteristic of an invalid tying arrangement lies in the
seller’s exploitation of its control over the tying product to force the buyer into the purchase of a
tied product that the buyer either did not want at all, or might have preferred to purchase
elsewhere on different terms”.

According to Hal Singer, an antitrust expert, some of Amazon's activities with third party
merchants conclusively lead to some questioning since once one can connect the conduct to
measurable harm, for instance, high pricing, then the company falls into the antitrust region.
However, Amazon disputes the allegations, claiming that their logistics prices are only
competitive, and their sellers are not penalized for the use of alternative delivery methods.
Amazon claimed that its pricing is roughly 50-80% lower in comparison to other companies.

The accusations against Amazon come as a significant development in previous government
investigations over Amazon's practices. The merchant in question said he wouldn't follow up on
the pursuit of the issue since it would risk his business, and also the merchant requested for
anonymity. He only hopes that the Federal Trade Commission will follow up the case to the
latter.

The letter claims that Amazon increased logistics fees by 20% over the past four years and that
their price is 35% more than other competitors. The merchant says that one is forced to use
amazon's logistics services or risk being suspended; this made him raise his prices by 12%. The
letter disputes Amazon's testimony that stated that the company only tries to offer the best to
customers and not to favor itself. He claims that he would provide the same products at a lower
cost if allowed to deliver them himself, he argues that those sellers who use Amazon logistics
evade punishment for late deliveries.

Amazon is the most extensive online market place in the U.S, and this makes customers easily
fall to their demands, the Fulfillment by Amazon (FBA), where sellers have to ship their
commodities to Amazon's warehouse for storage, packing and delivery at a considerable fee.
Contrarily, Amazon claims that the FBA is something their customers cherish since it's less
costly and more time-saving. Amazon also denied the accusation that those sellers that honor
FBA are favored in the website search for products. The merchant also claims that 120,000
Amazon orders through FBA, involved many that were delayed.

The merchant's letter claims that sellers are forced to use Amazon logistics, even where cheaper
options are available. He states that the worst part is the fact that they have the mandate to
suspend a seller or threaten to suspend those who don't honor the FBA.