The anti-trust ESG risk

Another company facing a contested AGM last week was Amazon. One of the resolutions on the AGM agenda called on the company to produce a report on competition strategy and risk. Which was timely, because the day before the AGM the DC Attorney General announced its intention to sue the world’s biggest online retailer for practices that allegedly artificially inflate prices for consumers and dictate how businesses can distribute their goods.
According to a lawsuit filed by Karl Racine, Attorney General for the District of Columbia, Amazon charges third-party sellers on its site fees of up to 40% of a product’s price and prevents them from charging less on other platforms. Consequently, this pushes prices up across the board.
According to a BBC report, Amazon says Washington DC has it ‘entirely backwards’ and its practices are all about fairness for customers and making life easier for small business.If successful, the US litigation will follow a prosecution in the the EU last November which found Amazon had unfairly analysed data on third-party sellers that use its marketplace to promote sales of its own-label goods. And it is yet another example of where lawmakers are taking a tougher line on the tech giants’ market domination.
Given how successful Amazon has been during the Covid-19 pandemic, it will take an awful lot for legal action to dent its coffers. Amazon’s revenue rose from USD 75bn (GBP 54bn) at end of April last year to USD 108.5bn for the three months to the end of March 2021. Profit was USD 8.1bn, up from USD 2.5bn a year ago.
The shareholder resolution, meanwhile, achieved a vote for of 33.6% – a very strong vote for a resolution on a new topic.

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