For raising market prices, the e-commerce giant was sued by California!

According to foreign media reports, recently, California Attorney General Rob Bonta announced a lawsuit against Amazon, accusing Amazon of violating unfair competition laws and the Cartwright Act.

The reason is that Amazon requires merchants to sign agreements prohibiting their products from being sold at lower prices on platforms other than Amazon, including competing websites such as Walmart, Target, and eBay. Otherwise, they will be severely sanctioned, such as canceling the merchant's "Buy Box" qualification, compensating Amazon, or the merchant being terminated from selling products on Amazon. This constitutes manipulation of market commodity prices.

Amazon’s actions not only hinder the competitiveness of other online retail platforms, but also harm the interests of merchants and consumers through inflated fees and higher prices, resulting in higher prices throughout California.

According to CIRP's report data, Amazon currently has more than 172 million members in the United States, with about 25 million customers in California alone. Since the outbreak, Amazon's Prime program has attracted about 30 million new members each year (2020 and 2021).

In addition, according to the latest U.S. holiday shopping season survey by Shopkick, 73% of consumers plan to shop at online retailers, and 98% of consumers said Amazon is their preferred shopping destination.

Amazon has become a necessary distribution channel for merchants precisely because of its position in the online retail platform market. Some sellers said that there is no viable alternative to Amazon for their business. Therefore, although many merchants are dissatisfied with Amazon's overbearing agreements and the total cost of selling on Amazon is far higher than the total cost of selling on other online stores, they still rely on Amazon, and many third-party sellers still join Amazon every day.

It is reported that this is not the first time that Amazon has faced allegations regarding its third-party pricing policies. In May last year, the Washington, D.C. Department of Justice filed a similar lawsuit, but the allegation was dismissed by a judge earlier this year because there was no relevant evidence to prove that Amazon caused price increases.

In addition, in July this year, the U.S. House of Representatives Judiciary Committee revealed that Amazon favored its own products and abused its dominant position to suppress competitors in order to achieve the purpose of monopolizing the market. It also abused its dominant position in the e-commerce field to force third-party sellers to purchase other services from Amazon, such as FBA logistics services and advertising.

In response to the accusation, an Amazon spokesperson said that the California Attorney General's statement was untrue and the lawsuit should be dismissed. What will happen next? En will continue to pay attention.

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