"Can't Sell Cheaper Elsewhere" California, USA Files Antitrust Lawsuit Against Amazon

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amazon, the world's largest e-commerce company, has been sued for antitrust violations by the California state government for forcing sellers not to set lower prices on competing platforms, according to reports by The Wall Street Journal (WSJ) and others on the 14th (local time).

According to the reports, Rob Bonta, Attorney General of California, announced the antitrust lawsuit on the same day, stating that Amazon prevented sellers from offering lower prices on other sites than its own platform and imposed severe penalties if they did not comply. As a result, Amazon gained an advantage over other online retailers, charged inflated fees to sellers, and caused consumers to pay higher prices, he explained.

Attorney General Bonta pointed out that if sellers lowered prices on other U.S. competitors such as Walmart, Target, or eBay, Amazon could place their products in less visible positions or prevent them from selling on the site, leaving sellers no choice but to comply.

This lawsuit follows an investigation by California that began in early 2020 and took over two years to complete. California is requesting the court to prohibit Amazon from maintaining this policy and to monitor its compliance.

WSJ analyzed, "This is the biggest legal challenge Amazon has faced in the U.S., following lawsuits from the Columbia district and ongoing investigations by the FTC, the EU, and congressional committees." WSJ added that California is an economically significant state in the U.S., and its decision could impact Amazon's business operations in the country.

Previously, Amazon faced a similar lawsuit from the Washington D.C. Attorney General's office last year. Amazon won in the first trial, but the Washington D.C. Attorney General appealed, arguing that the court misapplied antitrust laws.