California attorney general accuses Amazon of anti-competitive pricing

California Attorney General Rob Bonta has sued Amazon for allegedly anti-competitive pricing in violation of California's Unfair Competition Act and the Cartwright Act, the main statute California Antitrust. The lawsuit, filed in San Francisco Superior Court, accuses the company of contractually prohibiting third-party sellers from offering lower prices on platforms other than Amazon, forcing customers to pay artificially inflated prices online. p>

According to the lawsuit, which cites interviews with sellers, competitors and industry consultants conducted over several years, Amazon often removes buttons such as "Buy Now" and "Add to Cart" from product listings. it locates products listed for less on a competing site, such as Walmart or Target. Because these buttons are a primary driver of sales, third-party merchants have an incentive to raise prices in other marketplaces rather than risk losing sales on Amazon, the lawsuit says.

The Attorney General seeks a court order restraining Amazon from continuing the alleged practice as well as fines.

California accounts for a relatively small share of Amazon's customer base of 76.6 million people; approximately 25 million customers live in the state. But as the New York Times notes, it could have a wide impact across the country if it's successful. Amazon controls about 38% of online sales in the United States, more than eBay, Walmart, Best Buy, Apple and Target combined, according to research firm Insider Intelligence.

Other legal efforts against Amazon's contract terms haven't moved the needle too much. A lawsuit similar to the one in California brought by Karl Racine, the attorney general for the District of Columbia, was dismissed this spring after a judge ruled there was insufficient evidence that Amazon's policies were anti-competitive. (Racine intends to appeal.)

“Similar to the D.C. attorney general — whose complaint was dismissed by the courts — the California attorney general has it completely upside down,” Alex Haurek, an Amazon spokesperson, told the New York Times in a statement, responding to the allegations. "Vendors set their own prices for the products they offer in our store."

Other investigations are ongoing, however, including one led by Federal Trade Commission Chair Lina Khan, which is seeking to uncover instances of Amazon's antitrust violations and whether the cancellation process the company's Amazon Prime membership is deliberately confusing. Overseas, Amazon has long been the subject of antitrust scrutiny from the European Commission, the executive arm of the European Union, which has said the company is excluding competitors, developing premium products party using proprietary data from third-party sellers and pressured merchants to use its logistics services.