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California is suing Amazon for antitrust violation

NEW YORK — California has sued Amazon, accusing the company of violating the state’s antitrust laws by hindering competition and engaging in practices that push sellers to maintain higher prices on products elsewhere.

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

But California officials believe they won’t meet a similar fate, in part because of information gathered during a more than two-year investigation that involved subpoenas and interviews with sellers, Amazon competitors and current and former Amazon employees.

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

Merchants handling the lawsuit who don’t comply with the policy could see their products removed from featured listings on Amazon and face other penalties, such as account suspensions or terminations. It alleges that Amazon’s policy essentially forces merchants to post higher prices elsewhere, helping the retail giant maintain its dominance in e-commerce.

Among other things, the California lawsuit seeks to prevent Amazon from entering into contracts with sellers that harm price competition. It is also seeking an injunction to force Amazon to pay damages to the state for price gouging. State officials did not say how much money they are seeking.

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

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

Amazon has said in the past that sellers set their own prices on the platform. You have also said that you have the right to avoid highlighting products that are not competitively priced.

Despite that defense, Amazon’s market power has come under scrutiny from lawmakers and advocacy groups calling for tougher antitrust regulations. Earlier this year, lawmakers in Congress urged the Justice Department to investigate whether the company collects data about sellers to develop competing products and feature them more prominently on its site. Critics have also criticized increasing fees taxes on sellers, which makes it difficult for traders to enter the market.

Lawmakers on Capitol Hill have been pushing bipartisan legislation aimed at limiting Amazon and other big tech companies, including Apple, Meta and Google, from favoring their own products and services over rivals. The bill has passed key committees but has languished in Congress for months amid intense pushback from business.

Meanwhile, regulators have also been looking into Amazon’s business practices and deals. In July, the company offered concessions to liquidate two antitrust investigations in the European Union, including a promise to apply equal treatment to all sellers by sorting product offerings into the site’s “buy box,” a coveted spot that makes items more visible to buyers.

In the United States, the Federal Trade Commission is investigates the acquisition of Amazon for 3,900 million dollars from primary healthcare 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 faster shipping.

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