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California Files Suit Against Amazon Over ‘Anticompetitive’ Merchant Contracts

California filed antitrust charges against Amazon on Wednesday, alleging the web retailer could boost its prices by forcing sellers to sign contracts that stifle fair competition.

Amazon merchants are “coerced” into agreeing to terms that severely penalize them should they offer goods for less on other sites like eBay or Target, California Attorney General Rob Bonta alleged in a statement. Bonta said it is a violation of the state’s Unfair Competition Law and Cartwright Act.

“For a long time, California consumers have paid more because of their online purchases due to Amazon’s anticompetitive contracting practices,” he said. “With other e-commerce platforms struggling to compete on price, consumers turn to Amazon as a one-stop look for almost all their purchases. This perpetuates Amazon’s market dominance, allowing the business to create increasingly untenable demands on its merchants and costing consumers more at checkout across California.”

Prices will be lower, Bonta said, “if market forces were left unconstrained.”

The business has 160 million Prime members in america and around 25 million customers in California alone, based on the California attorney general’s office. Furthermore, Amazon has numerous offices in Southern California, investing in leasing nearly 440,000 square feet of commercial space in Santa Monica, Irvine and NORTH PARK.

A 2021 antitrust case against Amazon was dismissed, but that ruling has been appealed.A class action suit alleging the business is violating the Sherman Act along with other antitrust laws is before a federal judge in Washington state.

In a statement distributed to CNET, an Amazon spokesperson said Bonta “has it exactly backward.”

“Amazon takes pride in the truth that you can expect low prices over the broadest selection and, like any store, we reserve the proper never to highlight offers to customers that aren’t priced competitively,” the representative said. The California suit “would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”

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