California sues Amazon over third-party contracting

Attorney General Rob Bonta accused the e-commerce giant of engaging in anti-competitive practices.


By Jeremy B. White, POLITICO



SAN FRANCISCO — California is challenging Amazon in a case that could reshape the e-commerce giant’s business model by forcing it to lift restrictions on third-party vendors.


State Attorney General Rob Bonta announced on Wednesday that his office was suing Amazon for requiring merchants to enter agreements that penalize them if they offer their products elsewhere for lower prices. Bonta, a Democrat, argued that Amazon has violated California laws barring anti-competitive practices by shutting out competitors and effectively cementing higher prices — and he is seeking a court order barring Amazon from requiring third-party contracts that limit price competition, along with restitution for merchants and other financial penalties.


“Amazon makes consumers think they are getting the lowest prices possible, when in fact, they cannot get the low prices that would prevail in a freely competitive market because Amazon has coerced and induced its third-party sellers and wholesale suppliers to enter into anticompetitive agreements on price,” the complaint alleges. “The intent and effect of these agreements is to insulate Amazon from price competition, entrenching Amazon’s dominance, preventing effective competition, and harming consumers and the California economy.”


Bonta cast the lawsuit as a means to ensure Californians are not paying inflated prices during a time of rising costs...


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