California authorities sued Amazon for monopoly

California State Attorney’s Office filed in the San Francisco court a lawsuit against Amazon Corporation, accusing it of monopoly. Law enforcement officials believe that the company interferes with market competition, which has led to a rise in prices in the state and is contrary to California laws on fair competition. According to prosecutors, Amazon avoids fair price competition with other online stores. The corporation requires merchants operating on its platform to enter into agreements under which they are penalized if they sell their products elsewhere for less than on Amazon. According to prosecutor Rob Bonta, such agreements stifle competition in the market, forcing many merchants to sell their goods elsewhere at inflated prices. The prosecutor’s office believes that Amazon makes such actions “due to its dominant position in the market, which ultimately harms not only business, but also consumers.”

“For years, Amazon users had to pay more because of anti-competitive contracting practices,” prosecutor Bonta said. “Amazon forced merchants to artificially inflate prices, knowing that they could not afford to refuse to work with Amazon. Thus, other online stores where these same merchants worked could not afford to compete with Amazon on prices. Therefore, consumers went to Amazon, believing that this is the only place where they can buy everything. This only reinforces Amazon’s market dominance, allowing the corporation to make unacceptable demands on merchants.”

In its lawsuit, the California prosecutor’s office wants the court to bar Amazon from entering into such agreements and appoint a special commission that will monitor compliance with the corporation’s competition rules. The prosecutor’s office is also asking the court to determine the amount of the fine that the corporation must pay for violating local competition laws.

Evgeniy Khvostik