California’s attorney general filed a lawsuit against Amazon, alleging that the company had limited third-party sellers on its platforms by requiring them to sign deals that would limit their ability to adapt prices to the market.
California Attorney General Rob Bonta announced Wednesday that the state was suing Amazon for inflating its prices by signing restrictive deals with companies that it partners with on its platforms. These practices have helped Amazon entrench itself as the dominant seller in the marketplace and violate the state’s Unfair Competition Law and the antitrust-focused Cartwright Act, he alleged.
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“Amazon coerces merchants into deals that keep prices artificially high, knowing full well they have no real alternative,” Bonta said in a tweet. “We won’t let Amazon bend the market to its will at the expense of consumers and the economy.”
Bonta said at a press conference that an investigation from his office found that sellers on Amazon’s platform were not allowed to lower their prices due to agreements they signed with Amazon to get on the platform. This limitation on price control often meant that California consumers were overcharged.
Bonta requested that the Superior Court in San Francisco declare California’s actions unlawful, that it require Amazon to notify vendors that it does not require sellers to offer prices on par with off-Amazon prices, that it appoint a monitor to ensure the company’s compliance, and that it make Amazon compensate the state and the affected sellers accordingly.
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The lawsuit is the latest legal slam on Amazon amid growing scrutiny from regulators in the United States and Europe over the platform’s dominant presence in everyday life. The Big Tech company’s dealings have been under heavy scrutiny from the Federal Trade Commission to the point of Amazon accusing the FTC of “harassing” the company’s executives as part of its investigation into Amazon Prime.
Amazon did not respond to the Washington Examiner’s request for comment.
