California sues Amazon for forcing sellers on the platform to lower their prices

California sues Amazon for forcing sellers on the platform to lower their prices

The lawsuit notes that California officials sought an injunction to force Amazon to pay damages to the state for price gouging. However, they did not say how much money they are looking for.

California has launched a lawsuit against Amazon, accusing it of violating antitrust and unfair competition laws by stifling other retailers and engaging in practices that push sellers to maintain higher prices for their products elsewhere.

The 84-page lawsuit filed by California Attorney General Robb Bonta in San Francisco Superior Court mirrors another lawsuit from last year by the District of Columbia, which was dismissed by a district judge earlier this year and it is now going through an appeal process.

But California officials say the course of the lawsuit will be different this time, in part because of information gathered during a more than two-year investigation that involved subpoenas and interviews with sellers, Amazon competitors, as well as current and former employees. .

Amazon has taken similar action, but against administrators of Facebook groups accused of making false reviews of the company’s products.

What is Amazon accused of

In the lawsuit, the California attorney general’s office details that Amazon used contractual provisions to effectively prohibit third-party sellers and wholesale providers from offering lower prices for products on non-Amazon sites, including on their own websites.

The lawsuit contends that merchants 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.

During a press conference on Wednesday, Bonta said some vendors have said they would offer lower prices on other sites with lower selling fees, but are not doing so to avoid punishment from Amazon.

He said the lawsuit is also a message to other businesses that “illegally bend the market at the expense of California consumers, small business owners and the economy.”

He alleges that Amazon’s policy essentially forces merchants to post higher prices elsewhere, helping it maintain its dominance in e-commerce.

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

Amazon controls about 38% of US online sales, 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.

Melissa Galbraith
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.