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California alleges Amazon.com stifled price competition in lawsuit

California alleges Amazon.com stifled price competition in lawsuit

Written by Dave Parrish and Diane Bartz

SAN FRANCISCO (Reuters) – California sued Amazon.com (NASDAQ ๐Ÿ™‚ on Wednesday, alleging the company violated antitrust law by preventing price competition and raising prices for consumers.

California Attorney General Rob Ponta said Amazon’s rules prevent merchants from selling products at lower prices on their websites or in the stores of Amazon’s competitors.

โ€œThrough his actions, the virtually everything store has set a price floor, costing Californians more for almost everything,โ€ Ponta said.

The lawsuit was filed in San Francisco Supreme Court.

Amazon said in response to the filing that consumers could see higher prices if the lawsuit was successful. She said the company had “the right not to highlight offers to customers that are not priced competitively.” “The exemption he (the attorney general) is seeking would force Amazon to offer customers higher prices, which would strangely contravene the core objectives of antitrust law.”

The company is the world’s largest online retailer and has grown even larger during the pandemic. Over 200 million users are prime members, paying for faster shipping and other benefits.

โ€œAmazon forces merchants to enter into agreements that keep prices artificially high, knowing full well that they cannot say no. Since other e-commerce platforms are uncompetitive on price, consumers turn to Amazon as a one-stop shop for all their purchases,โ€ Ponta said. “This perpetuates Amazon’s market dominance.”

In the lawsuit, Ponta’s office asked the court to prevent Amazon from enforcing Amazon contracts that prohibit selling goods cheaper elsewhere and paying damages and penalties.

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Washington, DC filed a similar lawsuit against Amazon in May 2021. Amazon won her dismissal earlier this year. The lawsuit in California is based on various laws.

Ponta said Amazon offered to make changes to stave off a California lawsuit, but he deemed them unsatisfactory.

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