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California Sues Amazon Over Alleged Antitrust Violations

01 Amazon Logo box DG AH 2021
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Amazon is facing an antitrust lawsuit in California. The state attorney general has accused the company of anti-competitive behaviors, The New York Times reports.

Amazon is currently the biggest online retailer in the United States, and its market dominance narrows the field for other competitors. That’s why the company constantly faces antitrust lawsuits in the country and also abroad. This time, the California attorney general has filed an antitrust lawsuit against the company.

According to the report, Amazon is somehow dictating prices to sellers and buyers. For example, the company removes buttons like “Buy Now” and “Add to Cart” from a product listing page when it notices a product is listed cheaper on a competitor’s website.

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Amazon is abusing the market and competition by dictating prices to sellers

California’s attorney general Rob Bonta says Amazon is “costing Californians more for just about everything,” and “the collective magnitude of harm here is very far-reaching.” The state officials say Amazon has over 25 million customers there.

Removing the purchase buttons from the product pages is a way for Amazon to punish sellers for listing products at lower prices on other websites. It can also hurt the seller’s revenues. What Amazon does force sellers to increase their prices on Amazon’s rival websites, and in the end, customers have to pay higher prices for what they want to buy.

As per the complaint, “Without basic price competition, without different online sites trying to outdo each other with lower prices, prices artificially stabilize at levels higher than would be the case in a competitive market.”

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A similar case was previously filed against Amazon in D.C, and the court rejected it. Amazon hopes the court will also reject the California complaint too. A company spokesperson Alex Haurek said, “Sellers set their own prices for the products they offer in our store.” He added that Amazon is proud to offer lower 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 amount of fine Amazon would pay in case of conviction is still unclear. However, the company should pray that the fine would not be as hefty as the fine Google has to pay to the European Union.