California Sues Amazon For Alleged Anti-Competitive Contracting Practices - Statement

*WASHINGTON (Pakistan Point News / Sputnik - 15th September, 2022) California Attorney General Rob Bonta has sued e-commerce giant Amazon for allegedly shutting out competitors and causing prices to rise in the state, the Prosecutor's Office said in a statement on Wednesday.

"For years, California consumers have paid more for their online purchases because of Amazon's anticompetitive contracting practices," Bonta said in the statement. "Amazon coerces merchants into agreements that keep prices artificially high, knowing full well that they can't afford to say no."

Amazon violated California's Unfair Competition Law and the so-called Cartwright Act with its actions that stifled competition and caused prices to increase across the state, the statement said.

In order to avoid competing on prices with other online e-commerce sites, Amazon requires merchants to enter into agreements that severely penalize them if their products are offered for a lower price off-Amazon, the statement said.

These agreements thwart the ability of other online retailers to compete, contributing to Amazon's dominance in the online retail marketplace and harming merchants and consumers through inflated fees and higher prices, the statement said.

Bonta noted that Amazon was the dominant online retail store in the United States with more than 160 million Prime members nationwide and some 25 million customers in California alone. Bonta cited a survey where 96% of all Prime members said they are more likely to buy products from Amazon than any other online store and that 74% of all consumers go directly to Amazon when they are ready to buy a specific product.

"With other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases," Bonta said. "This perpetuates Amazon's market dominance, allowing the company to make increasingly untenable demands on its merchants and costing consumers more at checkout across California. The reality is: Many of the products we buy online would be cheaper if market forces were left unconstrained."

Bonta is seeking an order from the San Francisco Superior Court to stop Amazon's anticompetitive behavior and recover the damages to California's consumers and the state's economy.

The lawsuit asks the court to prohibit Amazon from entering into and enforcing contracts that harm price competition; require Amazon to affirmatively notify vendors that it does not require sellers to offer prices on par with off-Amazon prices; appoint a court-approved monitor to ensure Amazon's compliance with the court's order; order damages to compensate consumers harmed by increased prices; and order Amazon to return its ill-gotten gains and pay penalties to serve as a deterrent to other companies contemplating similar actions.