California sued Amazon on Wednesday, accusing the company of pushing sellers and suppliers into anti-competitive deals that drive up prices, including at competing online stores.
The lawsuit, filed by state Attorney General Rob Bonta, relates to how Amazon – the largest online retailer – deals with third-party merchants, who account for most sales on the platform.
California alleges that Amazon penalizes sellers and vendors who offer cheaper prices elsewhere on the internet, including Walmart and Target, for example by displaying their items lower or less prominently or blocking their new posts altogether.
“Amazon makes consumers think they are getting the lowest prices possible,” the lawsuit alleges, “when in fact they cannot get the low prices that would prevail in a freely competitive market because Amazon has coerced and incentivized its third-party sellers and suppliers basically entering into anti-competitive agreements. price agreements. »
The California antitrust lawsuit is one of Amazon’s biggest legal challenges in recent years, as lawmakers and regulators in the United States and abroad have investigated the retail giant for… possible anti-competitive practices.
Amazon has denied any violations of antitrust laws. Its representatives did not immediately comment on Tuesday’s trial.
California also accuses Amazon of creating an “anti-competitive vicious circle”: sellers see Amazon as unavoidable; Amazon charges them higher fees to be able to sell on its platform; Sellers, in turn, raise their Amazon prices. And, even though it costs them less to sell on other websites, Amazon’s policies also cause sellers to raise prices on those sites.
“Through its illegal actions, the, in quotes, ‘everything store’ has effectively set a price floor, costing Californians more for just about everything,” Bonta said at a press conference Wednesday.
Earlier this year, a judge dismissed a similar lawsuit filed in Washington, DC, although the city’s attorney general appealed.
In this case, Amazon argued that its agreements with merchants were intended to prevent shoppers from being overcharged and that punishing Amazon would hurt consumers.
Amazon has separately offered a settlement with European antitrust regulators, who have accused the company of breaching competition laws. Their main allegations accused the company of using data it had collected from third-party vendors for its own benefit.
Editor’s note: Amazon is one of NPR’s recent financial backers.