California sues Amazon for violating antitrust laws

California puts Amazon in the hot seat.
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On Wednesday, Attorney General (AG) Bob Bonta announced that California is suing Amazon for violating antitrust laws.

AG Bonata claims that Amazon’s policies regarding those who sell on its platform have blocked competition and increased prices for consumers. One main practice called into question is Amazon’s requirement that third-party sellers on its website do not sell their products elsewhere for lower prices. 

Another issue the lawsuit surfaces is Amazon’s wholesale policy wherein suppliers are punished for discounting products or preventing discounting by Amazon competitors. 

Bonata and his office have been working on the case for two and half years and are using interviews with sellers, data, internal Amazon files, and other evidence to back their claims. 

They are seeking $2,500 for each violation of the competition law and with an estimated 25 million customers in California, the total violation penalty could be significant. Currently, about 2 million sellers list their products on Amazon and they account for 58% of the company’s retail sales. 

California is not the only state bringing lawsuits against the e-commerce giant. Early this year the District of Columbia and Washington state both brought antitrust lawsuits against the company. 

In response, an Amazon spokesperson said, “The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law. We hope that the California court will reach the same conclusion as the D.C. court and dismiss this lawsuit promptly.”

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