Amazon has long been criticized for abusing its market power. The Californian public prosecutor's office is now taking action and is suing the online mail order company. This forces its dealers with gag contracts to keep prices artificially high. Amazon denies the allegations.
The most populous US state, California, has sued the world's largest online mail order company, Amazon, for alleged antitrust violations. The company is driving up prices through anti-competitive behavior in violation of California law, Attorney General Rob Bonta said in San Francisco on Wednesday.
Among other things, Bonta accuses Amazon of forcing third-party providers into shackle contracts that prohibit them from selling their goods cheaper on other trading platforms. Because of the group's great market power, smaller sellers could not defend themselves, and end customers would ultimately pay inflated prices. "The reality is, many of the products we buy online would be cheaper under free market forces," Bonta said. For hundreds of thousands of third-party providers, Amazon's online marketplace represents virtually their entire business, the prosecutor argued. Due to the high level of dependency, the company can dictate the conditions to them.
Critics have long accused Amazon of abusing its market power. The allegations also include that the group favors its own brands on the platform, uses trade data to spy on third parties and copies their product ideas.
An Amazon spokesman said sellers set their own prices for the products they sell on Amazon. "Amazon prides itself on offering low prices across the widest selection, and like any store, we reserve the right not to highlight offers to customers who are not competitively priced." The required changes would force Amazon to charge customers higher prices, which the company argued would go against the core objectives of antitrust law. It is hoped that the court in California will dismiss the lawsuit immediately.
