Amazon still can’t prevent third-party price lawsuits. The New York Times reports California has presented an antitrust lawsuit accusing Amazon of violating both the Cartwright Act and state competition law through its pricing rules. The Internet giant stifles competition by preventing sellers from offering lower prices elsewhere, according to Attorney General Rob Bonta. If they challenge Amazon, they risk losing buy buttons, featured listings, or even basic access to the Amazon marketplace.
If successful, the lawsuit would ban any contract deemed anticompetitive and notify sellers that they are free to cut prices elsewhere. Amazon would also have to pay damages, return “ill-gotten gains” and appoint a court-approved supervisor.
In a statement, an Amazon spokesperson said California had the situation “exactly backwards.” Third parties still have control over prices, Amazon claimed, and inclusion in the “Buy Box” space supposedly shows that a deal is truly competitive. In addition, he argued that demand would push prices up. You can read the full statement below.
The case is similar to a District of Columbia lawsuit. The region’s High Court dismissed that case in March citing lack of evidence, but Attorney General Karl Racine is appealing the decision.
Amazon is facing increasing government scrutiny of its practices. The Federal Trade Commission has been investigating issues ranging from major takeovers to tips of retained drivers, while pressure from the EU prompted Amazon to overhaul its seller program and improve the chances of third parties to compete with direct sales. The tech company has resisted these moves, going as far as calling for the FTC chairman to be impeached and fighting requests from the agency to interview executives. In other words, don’t expect either side to back down anytime soon.
“Like the DC Attorney General, whose lawsuit was thrown out of court, the California Attorney General has it exactly backwards. Sellers set their own prices for the products they offer in our store. Amazon prides itself on the fact that that we offer low prices on the widest selection, and like any store, we reserve the right not to highlight deals to customers that are not competitively priced The relief sought by the AG would force Amazon to offer higher prices to customers , which curiously runs counter to the core goals of antitrust law. I hope the California court will come to the same conclusion as the DC court and dismiss this lawsuit immediately.”
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