California unfair competition lawsuit

The California Attorney General has filed a lawsuit against Amazon. The focus is on the possible anti-competitive behavior of the group. This is said to have disadvantaged third-party providers on the Amazon Marketplace.

Amazon has built its marketplace into a gigantic place for e-commerce in recent years. But the platform offers the chance of good sales figures not only for the shipping giant itself, but also for many retailers.

It should be all the more annoying for third-party providers if their products are treated worse on the Amazon Marketplace than those from Amazon itself.

California Attorney General Rob Bonta agrees. Because he has Lawsuit against Amazon filed for anti-competitive behavior.

What is Amazon accused of?

California’s Attorney General has filed a lawsuit against Amazon in the San Francisco Superior Court. He accuses the shipping giant of anti-competitive pricing.

Amazon has contractually prohibited third-party providers on its marketplace from offering their products cheaper on other platforms. Amazon has “kept the prices artificially high”.

With other e-commerce platforms unable to compete on prices, consumers are turning to Amazon as a one-stop shop for all their purchases.

Amazon violates California’s unfair competition law and the Cartwright Act.

What happens if retailers don’t comply?

The California Attorney General’s lawsuit is based on interviews with vendors, competitors and industry advisers, how TechCrunch reported. These had been “managed for several years”.

According to these interviews, Amazon has “frequently” removed the “Buy Now” and “Add to Cart” buttons from products. This happened when retailers offered their products cheaper on another platform, for example at Walmart or Target.

Amazon has built its significant market power through retail and wholesale agreements that prevent effective price competition in the online retail market.

The lawsuit also mentions further sanctions against retailers. For example, they would have to struggle with less prominent entries in the Amazon search results if they did not adhere to the price agreements. It is even possible that Amazon will restrict or completely stop selling their products.

What is threatening the Amazon Marketplace in California now?

The Attorney General has now requested a court order. Because he could use it to prohibit Amazon from continuing the alleged practice. But there is also a fine.

This litigation could have “significant national implications” quotes the New York Times antitrust professor Christopher R. Leslie.

Because in the event of a defeat for Amazon, it can be assumed that “other states will take up the mantle and bring in other cases”.

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