California files anti-trust lawsuit against Amazon

Amazon is being sued by California, which claims that by limiting competition and engaging in actions that encourage sellers to retain higher pricing, the business has violated the state’s antitrust and unfair competition statutes.

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California files anti-trust lawsuit against Amazon

Amazon is being sued by the attorney general of California for allegedly breaking anti-trust laws. The lawsuit claims that the retailer knowingly stopped its competition while driving up the price of goods across the Internet. The largest retailer serves roughly 25 million people in California alone. While the lawsuit is restricted to the Golden State it could impact nationwide. Amazon said the California attorney general’s lawsuit has it exactly backward. It goes on to say that the relief they seek would force Amazon to feature higher prices, going against the core object itches of anti-trust law.

Bill Bear is here now for more on this he will help us break it down. Is he a visiting fellow at the Brookings Institute? Bill, clearly you are the person to talk to about this. Are you the only person to lead anti-trust enforcement at the Department of Justice and the Federal Trade Commission? What do you make of this lawsuit? It’s a very interesting and classic kind of lawsuit with the attorney general of California saying that Amazon has market power. It’s the main online retailer and it is forcing 3rd party sellers who need to be on Amazon, everybody does, to offer the best price to consumers on Amazon.

They can’t do it or face being cut off entirely from Amazon or being restricted in the placement they get when a consumer searches for what to do. The net effect of that, the California attorney is saying to limit price competition. Interesting. From your point of view is the central issue at play in this lawsuit? Amazon is unlike any other company.
It’s got massive scope, reach, and depth, and even with its formula can replicate products selling well through its brand called Amazon Basics and that’s rubbed a lot of people the wrong way. What’s the core issue from your point of view? It’s if am don is so essential for third-party sellers that they have to be dictated to.

They have to comply with Amazon’s turns and if what Amazon is doing is sort of a loose, loose for consumers and third-party sellers. Third-party sellers can’t offer a disappoint off some other site. Consumers lose the benefit of competition and the win is to Amazon which can keep prices up and keep driving traffic to it’s website.
It’s interesting. I can see the conflict. I have noticed and this is — that prices on Amazon have crept up over the years. Used to be able to go there and for sure get the best deal on almost anything for a consumer per sportive you can kind of tell that they are regulating prices now.

You can see this at play as a consumer. Is it true that Amazon argues that if they were to let the third-party sellers set their price the consumer would pay even more? Is that sort of gaslighting the situation? I think that it’s gaslighting the situation. We will see if the attorney general needs to prove this.

At the end of the day, amazon is a dominant firm. They should have the right to offer consumers lower prices elsewhere. That’s what Am Don is trying to stop. Yeah. Any expectation that other states may follow suit? We will see. California has a pretty strong anti-trust consumer protection law. The District of Columbia did file a similar lawsuit that got dismissed. They just didn’t have enough facts. I read this 80-page complaint from the California attorney general and it looks like they may have the effect.

California sues Amazon, alleging antitrust law violations

Their products are on other sites. John joins us live in the new center with a breakdown of the state’s allegations John yes, your Mike, this is a big deal Amazon is the world’s largest retailer and now the state of California is alleging. It’s been pushing up prices for customers now the state’s lawsuit claims Amazon has been forcing 3rd party sellers to enter into contracts that penalize them if they try to sell their products on other includes the company’s website.

Amazon’s practices prevent basic price Attorney General Rob Bonta is suing Amazon accusing the company of engaging in unfair business practices by pushing sellers to maintain higher prices on products sold on other sites. So for a decade. Amazon requires sellers to enter into contracts that severely penalize them if their products are offered for a lower price.

Off Amazon, you go up against a legal adversary, the size of Amazon and you better come with all your ducks in a row KTLA consumer analyst David Lazarus explains the lawsuit goes even deeper it alleges that if a seller violates any of these rules. Amazon comes back and punishes the seller by giving it non-preferential treatment in Amazon search results and if an Amazon user knows that’s crucial to influencing a purchase the lawsuit also alleges that Amazon might take away things that can facilitate a sale such as a buy now button.

Another Potential problem because if you take away the ease of purchase it undermines the entire Amazon experience and no seller wants to deal with Amazon responding in a statement saying in part sellers set their prices for the products they offer in our store and Amazon takes pride in the fact that we offer low prices across the broadest selection. Likewise, we have the right to not draw attention to deals that are not reasonably priced for clients, just like any other retailer.

But the state’s case will come down to the burden of proof can the state of California prove that Amazon does this do they have either anecdotal or contractual evidence that shows this is been the case? That’s very difficult and again amazon is an extremely good law company they will fight this every step of the way. Filed in San Francisco Superior Court earlier today.
Amazon says that if the state’s case is Successful it would force the company to future higher prices.

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