State Attorney General announced measure against big tech for “stifling competition” and harming consumers
California Attorney General Rob Bonta announced on Wednesday (Sep 14, 2022) that he has filed a lawsuit against online retail giant Amazon. According to him, the big tech violated the California Unfair Competition Act and the Cartwright Act by “smother the competition”cause “price increase” across the state through anticompetitive hiring.
“To avoid competing on price with other online e-commerce sites, Amazon requires merchants to enter into agreements that severely penalize them if their products are offered at a lower price outside of Amazon”, says an excerpt from Bonta’s statement. Here’s the intact of the note in English (337 KB).
The complaint, filed in San Francisco Superior Court, claims that these agreements undermine the competitiveness of other online retailers, contributing to the dominance of big tech in the market. In addition to negatively affecting consumers through “inflated rates and higher prices”.
“For years, California consumers have paid more for their online purchases due to Amazon’s anti-competitive hiring practices. It coerces traders into deals that keep prices artificially high, knowing full well they can’t say no. With other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases.”said Bonta.
He also said that the sellers “must agree not to offer lower prices on other platforms”, including their own websites.
Here is the list of what the case asks the Court:
Prohibit Amazon from entering into and enforcing its anticompetitive agreements that undermine price competition;
- require Amazon to affirmatively notify suppliers that it does not require sellers to offer prices equivalent to off-platform prices;
- appoint a court-approved monitor to ensure compliance with the measure;
- order measures to compensate for the harm caused to consumers through price increases;
- order to big tech to return its ill-gotten gains and pay fines to serve as a deterrent to other companies contemplating similar actions.
THE CNNAmazon stated that “The California attorney general is just the opposite. Sellers set their own prices for the products they offer in our store. Amazon prides itself on the fact that it offers low prices on the widest selection and, like any store, we reserve the right not to highlight offers to customers who are not competitively priced. The relief the prosecutor seeks would force Amazon to present higher prices to customers, strangely going against the core goals of antitrust law.”
In addition, the company asked the Court to close the case.
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