California Attorney General Rob Bontafiled an 84-page lawsuit against Amazon, alleging that the company obstructed competition across the state and caused product prices to rise by getting sellers to sign contracts in violation of the Unfair Competition Act.
In the written statement made on the website of the Attorney General’s Office, “To avoid price competition with other online e-commerce sites, Amazon requires agreements that severely penalize merchants who offer their products at a lower price outside of Amazon.‘ was included.
Attorney General Bonta claimed that these deals hinder the ability of other online retailers to compete, add to Amazon’s dominance of the online retail market and harm merchants and consumers through inflated fees and higher prices.
In the indictment, it was stated that Amazon penalized sellers and product suppliers who offered cheaper prices on the web pages of chain stores such as Walmart and Target by reducing their visibility on their site, dropping them to the back pages of search lists or completely blocking their new ads.
With over 25 million Prime members in California and more than 160 million across the US, Amazon is the most preferred online retail store in the country.
Amazon has also been accused by some antitrust bodies in Europe of violating competition laws and using data it collects from third-party vendors for its own benefit.