“With other ecommerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases,” he said.
The lawsuit says that Amazon’s agreements with merchants severely penalize them if their products are offered for a lower price on other sites, including competing sites like Walmart, Target, eBay, and, in some cases, even on their own websites.
Bonta said that Amazon’s agreements stipulate that sellers will lose the “Buy Now” button or that they’ll “compensate” Amazon if other online stores lower their prices. Other penalties include less-prominent listings on the site and even the possibility of termination or suspension of their ability to sell on Amazon, according to the lawsuit.
The lawsuit seeks to prohibit Amazon from entering into and enforcing its anti-competitive contracts and requests a court-approved monitor to ensure compliance, and for Amazon to compensate “for the harms to consumers through increased prices.” It also requests that the company “return its ill-gotten gains” and pay penalties to serve as a deterrent to other companies contemplating similar actions.
Bonta’s lawsuit is limited to California, which has around 25 million Amazon customers. But if successful, California’s lawsuit could have nationwide ramifications. The suit is similar to one that was filed by the DC Attorney General’s office, which was dismissed by a court in August.
An Amazon spokesperson rejected the claims made in California’s suit.
“The California Attorney General has it exactly backwards,” the spokesperson wrote to Consumer Reports in an email. “Sellers set their own prices for the products they offer in our store. Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively.”
The spokesperson went on to say that the AG would force Amazon to feature higher prices to customers, going against core objectives of antitrust law.
“We hope that the California court will reach the same conclusion as the D.C. court and dismiss this lawsuit promptly.”
