California sues Amazon for blocking price competition with rivals

First modification: 09/15/2022 – 18:36

After an investigation of more than two years, the California Attorney General’s Office discovered that the e-commerce giant would have prevented sellers on its platform from marketing their cheaper products through other channels.

For stifling competition and engaging in practices that push sellers to maintain higher prices, the state of California has sued Amazon, the largest online retailer and the second largest employer in the United States, after Walmart.

In the lawsuit, California Attorney General Rob Bonta’s office said the Seattle-based company used contractual provisions to prohibit third-party sellers and wholesale providers from offering lower prices for products on non-Amazon sites, including on Amazon. your own web pages.

“Many of the products we buy online would be cheaper if Amazon removed its restrictions on market forces,” added the prosecutor who led a long investigation since 2020.

#BREAKING: We’re suing @Amazon for blocking price competition.

Amazon coerces merchants into deals that keep prices artificially high, knowing full well they have no real alternative.

We won’t let Amazon bend the market to its will at the expense of consumers and the economy.

— Rob Bonta (@AGRobBonta) September 14, 2022

The lawsuit contends that merchants who don’t follow Amazon’s policies are removed from featured listings and face other penalties, such as account suspensions or terminations.

It is not the only process against Amazon

The 84-page lawsuit filed Wednesday, Sept. 14, in San Francisco Superior Court is similar to one filed by the District of Columbia last year, then dismissed by a judge earlier this year and now on appeal.

But California officials say their legal action will not meet a similar fate, in part because of information gathered that involved interviews with sellers, Amazon competitors and current and former employees.

Breaking News: California’s attorney general filed an antitrust lawsuit against Amazon, claiming the retailer stifles competition and increases prices for consumers. https://t.co/uq3qnqE0Gm

— The New York Times (@nytimes) September 14, 2022

In this new lawsuit, California not only seeks to prevent Amazon from harming price competition, but also an injunction to force it to pay damages to the state for the unjustified increase in prices to which consumers were subjected.

Amazon controls about 38% of US online sales, more than Walmart, eBay, Apple, Best Buy and Target combined, according to research firm Insider Intelligence.

About two million sellers list their products on Amazon’s platform, accounting for 58% of the company’s retail sales.

With AP and Reuters

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