California sues Amazon for anticompetitive practices

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California sues Amazon for anti-competitive practices

California accuses Amazon to drive up prices and hurt competition.

The California Attorney General on Wednesday filed lawsuits against Amazon, which he accuses of abusing its its dominance to curb competition and drive up prices, a complaint that adds to the already numerous attempts by regulators to curb the giant's expansion.

Amazon forces merchants to agree to deals that keep prices artificially high, knowing full well they can't afford to say no, prosecutor Rob Bonta said in a statement .

For years, California consumers have paid more for online purchases because of Amazon's anti-competitive practices, he claims.

< p class="e-p">According to the investigation by the prosecutor's office, the e-commerce juggernaut severely penalizes companies if their products are sold for less on other platforms.

The other marketplaces therefore have no chance of emerging, explains the prosecution, since Amazon dominates online consumption, in particular thanks to its loyalty program, Prime.

According to research conducted by Feedvisor and cited by the release, 96% of Prime subscribers are more likely to purchase products on the platform than anywhere else, and 74% of all American consumers go straight to Amazon when they have decided to buy something on the internet.

As a result, more and more third-party merchants are adopting Amazon every day, despite the fact that their total costs to sell on this site are much higher than those of other online stores, assures the prosecutor's office.

We have nowhere else to go and Amazon knows that very well, an anonymous seller quoted in the statement said.

Many US states are investigating the practices tech giants and have filed lawsuits, including against Google and Meta (Facebook), for antitrust violations.

A previous complaint against Amazon, filed by the attorney general for the city of Washington and similar to that of California, was dismissed in March by a judge.

We hope justice Californian will reach the same conclusion as that of Washington and will quickly reject these lawsuits, reacted the Seattle group, contacted by AFP.

Sellers set their own prices for the products they offer on our store, the spokesperson said. Amazon is proud to offer low prices on a very wide selection. And like any store, we reserve the right not to feature offers that aren't price competitive.

He assures that if Rob Bonta won its trial, the platform would be forced to display higher prices for customers, which would bizarrely go against the essential principles of competition law.

Amazon emphasizes in each publication of quarterly results and in press releases on the positive influence it believes to have for SMEs.

Last July, the partners of x27;Amazon, which are mostly small and medium-sized businesses, had their best Prime Day, the company welcomed a promotional operation. Their retail growth [on the platform] has exceeded that of Amazon products.

It will be extremely difficult to prove that Amazon is driving up prices, commented Neil Saunders, a director of the firm GlobalData.

According to the analyst, the criticized contracts by the prosecutor are not unusual, and do not prevent merchants from lowering their prices, as long as they also do so elsewhere, which guarantees the best prices for customers of the site.

It's also a bit hypocritical of California to feign concern for consumers, when the state enforces policies that keep many prices and taxes sky high, like on gasoline, he added.

The US Congress has been working on its own for years to reform competition law.

< p class="e-p">A series of bills directly targeting Google, Apple and Amazon were approved by a House Committee in June 2021, followed by the Senate Judiciary Committee in January.

The texts seek to limit the control exercised by these companies over their sales platforms (app stores for Google and Apple), where they are both judges and parties.

This is for example to prevent them from favoring their own products, from interfering with the prices set by merchants or from using use non-public data, generated by the sales of other sellers, to their advantage.

But the final vote has been postponed several times.

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