[The case mirrors a District of Columbia complaint alleging the
company pushes sellers to maintain higher prices on other sites ]
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CALIFORNIA ACCUSES AMAZON OF STIFLING COMPETITION IN NEW MAJOR
LAWSUIT  
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Associated Press
September 14, 2022
The Guardian
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_ The case mirrors a District of Columbia complaint alleging the
company pushes sellers to maintain higher prices on other sites _

California has sued Amazon, alleging the company has violated the
state’s antitrust laws., Photograph: Brendan McDermid/Reuters

 

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

The 84-page lawsuit filed on Wednesday in San Francisco superior court
mirrors another complaint filed last year by the District of Columbia,
which was dismissed by a district judge earlier this year and is now
going through an appeals process.

But officials in California believe they will not encounter a similar
fate, partly due to information collected during a more than two-year
investigation that involved subpoenas and interviews with sellers,
Amazon’s competitors as well as current and former employees at the
company.

In the lawsuit, the office of the California attorney general, Rob
Bonta, said Amazon used contract provisions to in effect bar sellers
from offering lower prices for products on non-Amazon sites, including
on the sellers’ own websites. That, in turn, harms the ability of
other retailers to compete.

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

Among other things, the California lawsuit seeks to stop Amazon from
entering into contracts with sellers that harm price competition. It
also seeks a court order to compel Amazon to pay damages to the state
for increased prices. State officials did not say how much money they
are seeking.

Seattle-based Amazon controls roughly 38% of online sales in the US,
more than that of Walmart, eBay, Apple, Best Buy and Target combined,
according to the 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 coerces merchants 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 said in the past that sellers set their own prices on the
platform. It has also said it has the right to avoid highlighting
products that are not priced competitively.

Despite that defense, Amazon’s market power has been a subject of
scrutiny from lawmakers and advocacy groups calling for stricter
antitrust regulations. Earlier this year, congressional lawmakers
urged the justice department to investigate if the company collects
data on sellers to develop competing products and offer them more
prominently on its site. Critics have also lambasted increasing fees
imposed on sellers, which makes it more difficult for merchants to
enter the market.

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

Meanwhile, regulators have also been looking into 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 apply equal treatment to all sellers when ranking product
offers on the site’s “buy box”, a coveted spot that makes items
more visible to shoppers.

In the US, the Federal Trade Commission is investigating Amazon’s
$3.9bn acquisition of the 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 faster
shipping.

* Amazon
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* Anti-trust
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* California
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* higher prices
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