Amazon is still facing lawsuits over third-party pricing. According to the New York Times, California has filed an antitrust lawsuit against Amazon, accusing it of violating both the Cartwright Act and state competition law through its pricing rules.
According to Attorney General Rob Bonta, the internet giant is stifling competition by preventing sellers from offering lower prices on other sites. They risk losing buy buttons, prominent listings, or even basic access to Amazon’s marketplace if they defy Amazon.
If the lawsuit is successful, it will prohibit any anti-competitive contracts and notify sellers that they are free to lower their prices elsewhere. Amazon would also have to pay restitution, return “ill-gotten gains,” and appoint a court-appointed monitor.
According to an Amazon spokesperson, California has the situation “exactly backwards.” Third-party price control remains, according to Amazon, and inclusion in the “Buy Box” space supposedly indicates that a deal is truly competitive. It also claimed that the suit would raise prices. The full statement is available below.
The case is similar to a lawsuit filed in the District of Columbia. The case was dismissed by the region’s Superior Court in March due to a lack of evidence, but Attorney General Karl Racine is appealing the decision.
Amazon’s business practices are increasingly being scrutinized by the government. The Federal Trade Commission has been looking into issues ranging from large acquisitions to withheld driver tips, while EU pressure prompted Amazon to revise its seller program and improve third-party competitors’ chances of competing with direct sales.
The tech company has resisted these moves, even going so far as to demand the FTC chair’s recusal and to fight agency requests to interview executives. In other words, don’t expect either side to back down anytime soon.
“Similar to the D.C. Attorney General—whose complaint was dismissed by the courts—the California Attorney General has it exactly backwards. 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 relief the AG seeks would force Amazon to feature higher prices to customers, oddly 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.”