SEATTLE — A new lawsuit was filed by Zulily in Western Washington District Court on Monday, alleging that Amazon intentionally sought to “destroy” the online retailer.
“The plot against Zulily was part of Amazon’s overall scheme to eliminate horizontal price competition among all online retailers marketwide; to make Amazon’s prices appear — falsely — to be the lowest without Amazon having to really compete; and to groom consumers not to look anywhere besides Amazon for the best retail pricing,” the lawsuit reads.
This comes in the wake of Zulily planning to eliminate nearly 300 jobs at its Seattle offices early next year, as well as a “going-out-of-business sale” that kicked off over the weekend.
In their lawsuit, Zulily claims that Amazon coerced third-party retailers and wholesale suppliers into “price parity” agreements as a means to “artificially raise Zulily prices at or above Amazon’s, and to punish any sellers who cheated.”
“Punishments ranged from disqualifying a seller from the ‘Buy Box’ — the mechanism most consumers use to buy an item or add it to their cart — to ‘total banishment from Amazon’s Marketplace,’” Zulily asserts. “For many sellers, these punishments, if carried out, threatened their very survival.”
As part of the suit, Zulily is asking for damages as well as a ruling that finds Amazon violated state and federal laws related to consumer protection, illegal monopolies, and unlawful trade restrictions.
Amazon sent us this statement regarding the lawsuit:
The allegations made in this lawsuit are false. The retail industry is dynamic and strong with many retailers succeeding, including small and medium size businesses who are thriving, growing and innovating. That includes many in our store, and they now make up more than 60% of sales on Amazon. We’re proud of the substantial investments we make to provide entrepreneurs with tools and resources to establish and build their brands, connect with more customers, and create jobs in their communities. - Amazon spokesperson, Tim Doyle