California filed a lawsuit against Amazon alleging that the company violated antitrust law by blocking price competition and raising prices for consumers. California Attorney General Rob Bonta said Amazon’s rules prohibit merchants from selling products at lower prices on their own websites or in the stores of Amazon rivals.
“Through its actions, the everything store has effectively set a price floor, costing Californians more for almost everything,” Bonta said. The 84-page lawsuit was filed in San Francisco Superior Court.
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Jeff Bezos’s company did not sit idly by. In response to the presentation, he said consumers could see higher prices if demand picks up. And in fact, he argued that the company has “the right not to highlight offers to customers that are not competitively priced.”
“The relief sought by (the attorney general) would force Amazon to offer higher prices to customers, which curiously runs counter to the core goals of antitrust law,” Amazon said in the filing.
The company, which is the world’s largest online retailer, grew even more during the pandemic and has more than 200 million users who are Prime members and pay for faster shipping and other benefits.
“Amazon forces merchants to agree to deals that keep prices artificially high, knowing full well they can’t afford to say no. With other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop.” unique for all your purchases,” said the prosecutor. “This perpetuates Amazon’s market dominance.”
Jeff Bezos, the CEO of Amazon
In his lawsuit, Bonta asked the court to bar Amazon from enforcing contracts that prohibit the sale of cheaper products elsewhere and from paying damages and fines. But California wasn’t the only one behind it: Washington filed a similar lawsuit against Amazon in May 2021, but the company won the dismissal of the case earlier this year.
California authorities believe, however, that they will not suffer the same fate, in part thanks to information gathered during an investigation of more than two years that included subpoenas and interviews with sellers, Amazon competitors and current and former employees of the company. .
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 the Amazon marketplace, accounting for 58% of the company’s retail sales.
The action of the State of California intensifies criticism and denunciations against the practices of the largest technology companies in the country, which are already the subject of scrutiny and investigations by regulators on both sides of the Atlantic.
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Newsom v. Bezos: California sued Amazon for violating antitrust law