California Attorney General Rob Bonta (D) sued Amazon on Wednesday, alleging the e-commerce giant stifled competition by raising prices for California consumers.
The lawsuit alleges that Amazon requires merchants to enter into agreements that result in penalties if their products are listed for sale below Amazon, resulting in higher prices for consumers.
“Amazon makes consumers think they are getting the lowest possible price when, in fact, they cannot get the lowest price possible in a free competitive market, because Amazon forces third-party sellers and wholesalers to enter into anticompetitive agreements on price,” California alleges in its complaint.
“The purpose and effect of these agreements is to prevent Amazon from competing on price, entrench Amazon’s dominance, prevent effective competition, and harm consumers and the California economy.”
The suit alleges that Amazon is able to “extract these anti-competitive terms” from third-party sellers and wholesalers because of its role as the “premier online retailer” in the US. He complains that they “do their whole business efficiently” and that for big brands, Amazon sales account for 20 to 30 percent of total sales.
An Amazon spokeswoman dismissed the anticompetitive behavior charge, citing a similar argument brought by Attorney General Carl Racine (D) in Washington, D.C., that was dismissed earlier this year.
“The California Attorney General is right back. Sellers set their own prices for the products they offer in our stores. Amazon is proud to offer the lowest prices on the widest selection, and like any store, we reserve the right not to highlight offers that are not reasonably priced to customers,” the spokesperson said in a statement.
“The relief the AG is seeking would force Amazon to offer higher prices to customers, which ironically contradicts the primary objectives of antitrust law. “We hope the California court reaches the same conclusion as the D.C. court and quickly dismisses this case,” the spokesperson added.
This is the latest in a long line of government-led prosecutions of tech giants. Other issues are being reported on Meta and Google. The Texas-led lawsuit will continue after a judge’s ruling against Google.
The California case is similar to the one in Racine. DC Attorney General He filed a notice of appeal last month in an effort to withdraw the case.
Amazon denies anti-competitive practice charges in DC case
