California accuses Amazon of stifling competition in new major lawsuit
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
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