California sues Amazon, alleging sellers forced to keep prices high

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California is suing Amazon, accusing the company of violating the state’s antitrust laws by undermining competition and engaging in practices that induce sellers to maintain higher prices on products on other sites.

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84 page lawsuit Another complaint filed Wednesday in San Francisco Superior Court, filed last year by the District of Columbia, was dismissed by a district judge earlier this year and is now going through the appeals process.

But California officials believe they will not face a similar fate, partly because of information gathered during more than two years of investigations that included sellers, Amazon’s competitors as well as the company. Interviews and interviews with current and former employees of the


In the lawsuit, California Attorney General Rob Bonta’s office said that Amazon used contract provisions to effectively prohibit sellers from offering reduced prices for products on non-Amazon sites, including sellers’ own websites. This, in turn, hurts other retailers’ ability to compete.

The suit maintains merchants who do not comply with the policy may have their products removed from prime listings on Amazon and face other sanctions such as suspension or termination of their accounts. It alleges that Amazon’s policy essentially forces merchants to list higher prices on other sites, helping the retail giant maintain its e-commerce dominance.

“Amazon engages merchants in agreements that keep prices artificially high knowing full well that they can’t afford to say no,” said California Attorney General Rob Bonta.
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Among other things, the California lawsuit seeks to prevent Amazon from entering into contracts with sellers that hurt price competition. It also seeks a court order to compel Amazon to pay damages to the state for the increased prices. State officials did not say how much money they were asking for.

According to research firm Insider Intelligence, Seattle-based Amazon controls about 38% of online sales in the US, more than Walmart, eBay, Apple, Best Buy and Target combined. About 2 million sellers list their products on Amazon’s third-party marketplaces, which account for 58% of the company’s retail sales.

“Amazon forces traders into agreements that keep prices artificially high knowing full well that they can’t afford to say no,” Bonta said in a statement.

Amazon has already said that sellers set their own prices on the platform. It has also said that it has the right to refrain from highlighting products whose prices are not competitive.

Despite that defense, Amazon’s market power has been the subject of scrutiny from lawmakers and advocacy groups, which call for stricter antitrust rules. Earlier this year, congressional lawmakers urged the Justice Department to investigate whether the company collects data on vendors to develop competing products and features them more prominently on its site. Critics also lashed out rising fees Sellers are taxed, making it more difficult for traders to enter the market.

Lawmakers on Capitol Hill are pushing for bipartisan legislation aimed at limiting Amazon and other Big Tech companies including Apple, Meta and Google from favoring their products and services over rivals. The bill has approved key committees, but lay in Congress for months amid intense backlash from companies.

Meanwhile, regulators are also monitoring Amazon’s business practices and deals. In July, the company offered concessions to settle two antitrust investigations in the European Union, including a promise to enforce equal treatment for all sellers when ranking product offers on the site’s “buy box”, a reputable Location is what makes items more visible to buyers.

In the US, the Federal Trade Commission is investigating Amazon’s $3.9 billion acquisition of primary health organization One Medical, as well as the sign-up and cancellation practices of Amazon Prime, the company’s paid subscription service that offers deals and fast shipping. Is.

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