California sues Amazon for anticompetitive practices

California sues Amazon for anticompetitive practices
© Belga

The Attorney-General of the U.S. State of California launched a lawsuit on Wednesday against Amazon, which he accused of abusing its dominant position to curb competition and drive prices up.

“Amazon coerces merchants into agreements that keep prices artificially high, knowing full well that they can’t afford to say no,” Attorney-General Rob Bonta said in a statement. “For years, California consumers have paid more for their online purchases because of Amazon’s anti-competitive practices."

According to the investigation conducted by the Attorney-General’s office, the e-commerce giant “severely penalises” companies if their products are sold for less on other platforms. As a result, the other marketplaces have no chance of emerging since Amazon dominates online consumption, in particular thanks to its loyalty programme, Prime, the office charged.

Research conducted by Feedvisor and cited in the statement shows that 96% of Prime subscribers are more likely to purchase products on the platform than anywhere else, and 74% of all U.S. consumers go directly to Amazon when they decide 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 significantly higher than those of other online stores,” the Attorney-General’s office argued.

Amazon did not immediately respond to a request for a reaction from French news agency AFP.

U.S. states have been investigating anti-competitive practices by tech giants and have launched a number of antitrust lawsuits, including against Google and Facebook.

A previous complaint against Amazon, filed by Washington’s Attorney-General and similar to California’s, was thrown out in March by a judge.

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