A lawsuit filed Wednesday in San Francisco Superior Court by California’s chief law enforcement officer Rob Bonta said that Amazon has stifled competition in the market for online retail sales of new products for home delivery. The state wants to curb Amazon’s anticompetitive practices and give sellers more options, with the ultimate hope of driving down the prices that Amazon has artificially buoyed with its pricing parity agreements.
The suit is not the first to scrutinize Amazon’s power over merchants and customers. The Federal Trade Commission has flagged Amazon’s pricing policies and several lawsuits have come in its wake. District of Columbia Attorney General Karl Racine took issue with the company’s dominance and unfair practices, as reported earlier this year. The District lost the case and has since appealed.
Meanwhile, a class action by Amazon shoppers survived the company’s dismissal bid in March. The Seattle, Wash. federal court ruled that the plaintiffs’ antitrust claims could proceed on the theory that Amazon prevents sellers from reducing the prices of their products on external platforms with lower fees.
This week’s suit presented what it called direct evidence of Amazon’s market power, including the aforementioned agreements effectively preventing price competition in the online retail marketplace. It also cited the company’s “persistent excess returns,” citing its “staggeringly high and increasing profits, and high profit margins.”
The attorney general’s lawsuit seeks an order from court that stops Amazon’s anticompetitive behavior and recovers damages incurred by California consumers and the state’s economy. Specifically, it asks the court to bar Amazon from enforcing anticompetitive contracts that harm price competition and requiring the company to affirmatively notify vendors that it does not require sellers to offer prices on par with off-Amazon prices, among other things.
