California accuses of stifling price competition in lawsuit According to Reuters

© Reuters. The Amazon logo is displayed on a sign outside the company’s LDJ5 sorting center, as employees begin voting to unify the second warehouse in the Staten Island district of New York City, U.S.A. on May 25. 4, 2022. REUTERS / Brendan McDermid.

By Paresh Dave and Diane Bartz

SAN FRANCISCO (Reuters) – California filed a lawsuit against (NASDAQ:) on Wednesday, alleging that the company violated antitrust laws by preventing price competition and pushing up prices for consumers. .

California Attorney General Rob Bonta said Amazon’s rules prohibit merchants from selling products at lower prices on their own websites or in stores of Amazon’s competitors.

“Through its actions, the everything store has effectively established a price floor, causing Californians to pay more for pretty much everything,” Bonta said.

The lawsuit was filed in San Francisco Superior Court.

Amazon said in response to the lawsuit that consumers could see higher prices if the lawsuit is successful. The company reserves the “right not to highlight offers to customers that are not priced competitively,” it said. “The relief that (the attorney general) seeks would force Amazon to charge higher prices to customers, which goes against the core goals of antitrust law.”

The company is the world’s largest online retailer and has grown even stronger during the pandemic. Over 200 million users are Prime members, paying for faster shipping and other benefits.

“Amazon forces merchants into agreements that artificially keep prices high, knowing full well that they can’t refuse to make purchases,” said Bonta. “This maintains Amazon’s market dominance.”

In its lawsuit, Bonta’s office asked the court to ban Amazon from enforcing Amazon’s contracts that forbid the sale of goods at cheaper prices elsewhere and to pay damages and penalties.

Washington, DC, filed a similar lawsuit against Amazon in May 2021. Amazon won the case earlier this year. The California case is based on different laws.

Bonta said Amazon has offered to make changes to stop California’s lawsuit, but he considers them inadequate.

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