CA Attorney General Files Lawsuit Against Amazon

By Desert Star Staff

California Attorney General Rob Bonta today secured a court ruling that blocked an attempt by Amazon to evade responsibility by denying Amazon’s request that California’s lawsuit against the company is dismissed. In September, Attorney General Bonta filed a lawsuit against Amazon, alleging that the company stifled competition and caused increased prices across California through anticompetitive contracting practices.

“As California families struggle to make ends meet, we’re in court to stop Amazon from engaging in anticompetitive practices that keep prices artificially high and stifle competition,” said Attorney General Bonta. “There is no shortage of evidence showing that the ‘Everything store’ is costing consumers more for just about everything. We won’t stand by while Amazon uses coercive contracting practices to dominate the market at the expense of California consumers, small business owners, and the economy.”

The California Attorney General filed a lawsuit against Seattle-based Amazon last September, claiming the e-commerce giant is preventing sellers from offering lower prices on other websites. That means customers pay too much for products, according to state officials.

The suit follows a similar complaint filed by the District of Columbia last year. That case was dismissed in March 2022, but the city’s attorney general plans to appeal.

In January 2022, Amazon settled a price-fixing probe by Washington State Attorney General Bob Ferguson by paying a $2.25 million fine and shuttering a program that guaranteed minimum prices for sellers who agreed to stop competing on price.

How the lawsuit works

The first step in filing a lawsuit is to file a complaint. This document outlines the allegations against the defendant and what they owe you for the harm they caused.

After a plaintiff has filed the complaint, the defendant must be served with a formal “answer.” They must admit or deny all of the allegations in the complaint and set forth any defenses they may have.

Once the answer is served, a case can begin to move forward in court. This can include discovery and a structured evidence exchange between the parties.

Once the trial begins, both sides present their arguments to a judge or jury. After the trial, the judge or jury will issue a decision.

Third-party sellers

Amazon sells many products, including books, music, videos, and streaming services. It also produces a variety of consumer electronics, such as Kindle e-readers, Echo devices, and Fire tablets.

Third-party sellers are a big part of Amazon’s business, as they earn a significant portion of their revenue from sales on the site. However, a ruling in favor of the California attorney general would upend that relationship, putting more pressure on third-party vendors to meet stricter vetting standards and possibly leading to fewer sellers.

If California succeeds, it could open antitrust enforcement to companies like Walmart and other significant players who have entered the third-party marketplace business. But there are other concerns for those who value consumers.

The impact of such a ruling on e-commerce would be profound, given how it is set up to function in our modern world. This could lead to a more weaponized approach to antitrust enforcement, with companies focusing on their size rather than the benefits they bring to consumers.

Amazon’s response California has filed an antitrust lawsuit claiming that Amazon uses contracts to stifle competition and raise prices. The state’s attorney general says these practices violate state law and will cost consumers more for everyday purchases.

The lawsuit stems from a two-year investigation and aims to block the company from enforcing these policies and appoint a monitor to ensure compliance. It also asks for damages and civil penalties of $2,500 for each violation of California’s competition laws.

But the lawsuit is based on several plausible theories of harm, some of which need to be backed by more complex data. These include that sellers selling their products on Amazon will pay more in fees than if they sold them on their website, and buyers will be discouraged from buying from other retailers, causing them to buy from Amazon.

Damages

If the state’s lawsuit against Amazon is successful, it could force the e-commerce giant to pay billions of dollars in damages. That would be far higher than the damages awarded in a similar lawsuit filed last year in Seattle.

Attorney General Rob Bonta said Wednesday that he is filing the suit against the online retailer for alleged anticompetitive practices that cause consumers to pay higher prices. He said the company broke the law and stifled competition for years.

The California complaint shows how Amazon uses contract provisions to bar third-party sellers and wholesale suppliers from offering lower product prices on non-Amazon sites. Those merchants who don’t comply face sanctions such as less prominent listings and the possibility of termination or suspension.