The Attorney-General of the U.S. State of California has launched a lawsuit on Wednesday against Amazon, which he accused of abusing its dominant position to curb competition and drive prices up.
“Amazon forces 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. “California consumers have paid more for years for their online purchases due to 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.
U.S. states have been investigating tech giants’ anti-competitive practices and have launched many antitrust lawsuits, including against Google and Facebook.