California seeks injunction to stop Amazon's alleged stifling of price competition
FILE PHOTO: A delivery cart loaded with a number of packages from Amazon stands on a sidewalk in New York City, New York, U.S., July 25, 2019. REUTERS/Lucas Jackson/File Photo
Feb 24 : California asked a state judge on Tuesday to stop Amazon.com from inflating prices for consumers through an alleged campaign to bully merchants not to sell goods more cheaply elsewhere.
The state's attorney general, Rob Bonta, sought a preliminary injunction in his 3-1/2-year-old antitrust lawsuit against Amazon, which also seeks to recoup ill-gotten profits.
"Amazon’s goal is to insulate itself from price competition by preventing lower retail prices in the market," Bonta said in a heavily redacted filing in the California Superior Court in San Francisco. "Amazon tells vendors what prices it wants to see to maintain its own profitability."
Bonta said his office has uncovered "countless" interactions where Seattle-based Amazon, rivals and merchants agreed to fix prices to ensure that Amazon would not be undercut on websites such as eBay, Target and Walmart.
In a statement, Amazon said: "The Attorney General's motion is a transparent attempt to distract from the weakness of its case, coming more than three years after filing its complaint and based on supposedly ‘new’ evidence they have had for years. Amazon looks forward to responding in court."
Bonta said Amazon and rivals, with merchants acting as intermediaries, often agreed to raise prices or make products temporarily unavailable, eliminating any need for price-matching.
Merchants that rejected Amazon's demands would be cut off or denied access to its "Buy Box," where shoppers can click "Add to Cart" or "Buy Now," Bonta said.
The Buy Box accounts for the vast majority of sales on Amazon's website.
"We welcome companies that succeed by offering better prices and better service," Bonta said in a statement. "What we have here is a greedy, behemoth corporation intentionally increasing prices in the marketplace to get richer and richer off the backs of consumers."
The proposed injunction would stop Amazon's alleged anticompetitive conduct while the case is pending, and a monitor would oversee Amazon's compliance.
Amazon has argued in court papers that its "procompetitive" agreements with merchants are legal, commonplace in the industry and benefit consumers through increased product selection, appropriate product stocking and competitive prices.
A trial is scheduled for January 2027.
