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California Sues Amazon Over Blocking Competitive Pricing
Amazon is legal hot water again, with the state of California suing the e-commerce giant for blocking competitive pricing.
Amazon has a long-standing history of preventing its third-party resellers from offering lower prices on other platforms or outlets. California Attorney General Rob Bonta has filed a suit, claiming the practice is anticompetitive and in violation of California’s Unfair Competition Law and Cartwright Act.
“For years, California consumers have paid more for their online purchases because of Amazon’s anticompetitive contracting practices,” said Attorney General Bonta. “Amazon coerces merchants into agreements that keep prices artificially high, knowing full well that they can’t afford to say no. With other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases. 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. With today’s lawsuit, we’re fighting back. We won’t allow Amazon to bend the market to its will at the expense of California consumers, small business owners, and a fair and competitive economy.”
Amazon is under scrutiny because of its position in the US retail market, with 74% of US customers reportedly going straight to the retail giant for purchases. Similarly, 96% of the company’s 160 million US Prime members say they are more likely to buy from Amazon than a competing online store.
As a result of its market dominance, customers and resellers alike have little to no alternative than to agree with whatever terms Amazon imposes. According to AG Bonta, one seller said, “We have nowhere else to go and Amazon knows it.” Another said, “There is no viable alternative to Amazon for my business.”
California’s lawsuit is the latest effort by regulators and lawmakers to reign in Big Tech and level the competitive playing field.
California Sues Amazon Over Blocking Competitive Pricing
Matt Milano
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