Author: Mike Ross
Amazon is being sued by the state of California, for violating the trade laws of the state. Amazon is accused of suppressing competition and participating in price manipulation against other e-commerce stores.
Amazon Prohibits Offering Lower Prices on Products
Rob Bonta, the state’s attorney, stated in the case that Amazon violates competition price by threatening to derank or close the store of any vendor that offers lower prices than what they offer buyers on its platform.
This obviously makes it difficult to compete with Amazon, thereby illegally kicking other retail stores out of competition.
In addition to Amazon sanctions, retailers that violate the guideline risks account restrictions or cancellation.
It asserts that Amazon’s approach pushes retailers to advertise higher pricing on competing websites, supporting the retail giant’s kingship in the e-commerce niche.
California wants to Prevent Amazon from Entering into Contracts with Sellers
The California lawsuit is aim to prevent Amazon from entering into price management agreements with merchants.
Also, the court was asked to issue an injunction, compelling Amazon to compensate the state for price manipulation.
In a letter, Bonta stated, “Amazon tries to force retailers into agreements that keep prices artificially high, realizing quite well that many probably couldn’t afford to say no.”
Politicians and advocacy organizations pushing for more robust antitrust laws have questioned Amazon’s market dominance. Members of Congress encouraged the justice department to look into whether the business gathers information from vendors to create rival items and promote them more widely on its website.
Critics have also criticized the rising fees that make it more challenging for retailers to join the market.
Amazon’s Business Practices and Deals
The business promised to regard all sellers equally when ranking listings on the site’s “buy box,” – The Buy Box is the white box on the right side of the Amazon product page. The space allows customers to add items for purchase to their cart. However, not all sellers are eligible.
The $3.9 billion sale of One Medical by Amazon in the U.S. is under investigation by the Federal Trade Commission.
Answer from Amazon
This situation is not unique. In a claim related to the lawsuit filed by the D.C. attorney general of the United States in 2015, Amazon claimed that its policy on sellers collaborating with several other websites was designed to protect customers from overpaying.
Things are not at their best for Amazon. The giant retail store is accused of price manipulation and illegally kicking competitors out of the market. That is not a good accusation for a business that has been gaining influence and dominance over rival companies for years. But when we learn about the court’s decision, all the information will be accessible.