Amazon.com Inc (NASDAQ:AMZN) is being sued by the state of California over allegations that the company violated antitrust law by blocking price competition and pushing up prices for consumers.
The lawsuit filed in San Francisco Superior Court alleges that Amazon's rules bar merchants from selling products at lower prices on their own websites or at the stores of Amazon's rivals.
"Through its actions, the everything store has effectively set a price floor, costing Californians more for pretty much everything," said California Attorney General Rob Bonta, according to Reuters.
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In a statement in response to the lawsuit, Amazon said that consumers could see higher prices if the lawsuit succeeds. The company has the "right not to highlight offers to customers that are not priced competitively," it added. "The relief the (attorney general) seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
Amazon has offered to make changes to stave off California's lawsuit, Bonta said, but he deemed them unsatisfactory, according to Reuters.
"Amazon coerces merchants into agreements that keep prices artificially high, knowing full well that they can't afford to 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," Reuters reported Bonta as saying. "This perpetuates Amazon's market dominance."
Washington DC filed a similar lawsuit against Amazon in May 2021, which Amazon won dismissal of earlier this year, Reuters said.
Amazon is the world's largest online retailer and grew even bigger during the pandemic. Over 200 million users are Prime members, paying for faster shipping and other benefits.
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