California Attorney General Rob Bonta has filed a lawsuit against Amazon, accusing the Seattle-based e-commerce giant of anti-competitive behavior in its dealings with third-party merchants, DPA reported.
“California consumers have paid more for their online purchases for years because of Amazon’s anti-competitive contract practices,” Bonta said in a statement issued before yesterday’s press conference.
Amazon is forcing merchants into agreements that keep prices artificially high, knowing full well they can’t afford to back out. “With other e-commerce platforms unable to compete on price, consumers are turning to Amazon as a one-stop shop for all their purchases,” he noted.
The result is the continued market dominance of a trillion-dollar company that has gotten even bigger during the pandemic, allowing it to make increasingly untenable claims on merchants and resulting in higher costs for consumers in California,” the attorney general added.
In an emailed statement to the Los Angeles Times, an Amazon spokesman disputed Bonta’s characterization of the company. “Sellers set their own prices for the products they offer in our online store,” he said.
“Amazon prides itself on the fact that we offer low prices on the widest assortment, and like any store, we reserve the right to turn customers away from offers that are not competitively priced. The customer relief that the Attorney General seeks would force “Amazon to offer higher prices to customers, which strangely runs counter to the basic goals of antitrust law,” according to the spokesperson.
The attorney general’s office said Amazon violated California’s unfair competition law, the legal basis for a wide range of consumer protection cases, and the state’s antitrust law known as the Cartwright Act.
According to their agreements with Amazon, wholesalers and retailers – third parties are not allowed to offer lower prices on other sites, including but not limited to those of Amazon’s competitors – Walmart (Walmart), Target (Target ) and EBay, but also in some cases on their own sites. This is stated in the communiqué of the Prosecutor General’s Office.
What’s more, merchants may be required to compensate the tech giant if other online stores offer a better price, according to the release. According to reports, merchants who do not comply “will face sanctions such as less prominent listings of their goods and even the possibility of having their products suspended or discontinued.”
According to a copy of the case, an analysis of data by the attorney general’s office showed that merchants generally did not lower prices in the Amazon store to meet their contractual obligations and instead raised them elsewhere.
Bonta wants the San Francisco County Superior Court to bar Amazon from entering into such contracts, order the company to “return its ill-gotten gains” and be held accountable for the higher prices consumers have had to pay as a result.
The attorney general’s office told The Times that the upcoming trial will drag on, but declined to give specific timelines.
Amazon hopes the lawsuit will be dismissed quickly, the company’s spokesman said.