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California sues Amazon, alleging antitrust law violations

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California is suing Amazon, accusing the corporate of violating the state’s antitrust laws by stifling competition and fascinating in practices that push sellers to take care of higher prices on products on other sites.

The 84-page lawsuit filed Wednesday in San Francisco Superior Court mirrors one other grievance filed last 12 months by the District of Columbia, which was dismissed by a district judge earlier this 12 months and is now going through an appeals process.

But officials in California consider they won’t encounter an identical fate, partly as a consequence of information collected during a greater than two-year investigation that involved subpoenas and interviews with sellers, Amazon’s competitors in addition to current and former employees at the corporate.

Within the lawsuit, California Attorney General Rob Bonta’s office said Amazon used contract provisions to effectively bar sellers from offering lower prices for products on non-Amazon sites, including on the sellers’ own web sites. That, in turn, harms the flexibility of other retailers to compete.

The suit maintains merchants that don’t comply with the policy could have their products stripped from outstanding listings on Amazon and face other sanctions resembling suspensions or terminations of their accounts. It alleges Amazon’s policy essentially forces merchants to list higher prices on other sites, helping the retail giant maintain its e-commerce dominance.

“Amazon coerces merchants into agreements that keep prices artificially high, knowing full-well that they’ll’t afford to say no,” California Attorney General Rob Bonta said. AP

Amongst other things, the California lawsuit seeks to stop Amazon from moving into contracts with sellers that harm price cutting war. It also seeks a court order to compel Amazon to pay damages to the state for increased prices. State officials didn’t say how much money they’re searching for.

Seattle-based Amazon controls roughly 38% of online sales within the US, greater than that of Walmart, eBay, Apple, Best Buy and Goal combined, in accordance with the research firm Insider Intelligence. About 2 million sellers list their products on Amazon’s third-party marketplace, accounting for 58% of the corporate’s retail sales.

“Amazon coerces merchants into agreements that keep prices artificially high, knowing full-well that they’ll’t afford to say no,” Bonta said in an announcement.

Amazon has said previously that sellers set their very own prices on the platform. It has also said it has the correct to avoid highlighting products that will not be priced competitively.

Despite that defense, Amazon’s market power has been a subject of scrutiny from lawmakers and advocacy groups calling for stricter antitrust regulations. Earlier this 12 months, congressional lawmakers urged the Justice Department to research if the corporate collects data on sellers to develop competing products and offer them more prominently on its site. Critics have also lambasted increasing fees imposed on sellers, which makes it harder for merchants to enter the market.

Lawmakers on Capitol Hill have been pushing bipartisan laws aiming to limit Amazon and other Big Tech firms, including Apple, Meta and Google, from favoring their very own services over rivals. The bill has cleared key committees but has languished in Congress for months amid intense pushback from the businesses.

Meanwhile, regulators have also been looking into Amazon’s business practices and deals. In July, the corporate offered concessions to settle two antitrust investigations within the European Union, including a promise to use equal treatment to all sellers when rating product offers on the location’s “buy box,” a coveted spot that makes items more visible to shoppers.

Within the US, the Federal Trade Commission is investigating Amazon’s $3.9 billion acquisition of the first health organization One Medical in addition to the sign-up and cancellation practices of Amazon Prime, the corporate’s paid subscription service that gives deals and faster shipping.

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