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Saturday, October 1, 2022

Amazon is being sued for antitrust violations by the state of California

The filing of an antitrust lawsuit against Amazon by the attorney general of the state of California. The action alleges that the online retailer suppresses competition and drives up the prices that customers pay for goods and services throughout the internet.

The lawsuit is only aimed at the state of California, where it is believed that Amazon has over 25 million users, but if it is successful, it might have significant repercussions for the rest of the nation.

Losing access to those buttons, which are a significant part of what drives sales for firms who sell their products via Amazon, may have a devastating impact on those companies’ bottom lines very rapidly.

The situation is difficult for the vendors at the market because of this. They are able to sell things at reduced costs on websites other than Amazon since the cost of utilising other websites is sometimes lower than the cost of using Amazon. According to the complaint, which was based on interviews with vendors, rivals, and industry experts, Amazon is by far the biggest online retailer. As a result, retailers would rather boost their prices on other sites than risk losing their sales on Amazon.

The lawsuit that was filed in California is the most recent in a series of increasingly aggressive moves by states and authorities in Washington and Europe to limit the influence of the most powerful businesses in the technology sector. A record fine in the multibillions of dollars was levied on Google in 2018, and a court in the European Union granted its approval on Wednesday as well.

According to Mr. Haurek, Amazon is confident that the lawsuit will be thrown out, and the company takes great pride in providing low prices “across the broadest selection.” However, just like any other store, Amazon reserves the right not to highlight offers to customers that are not priced competitively.

Products sold by independent vendors on Amazon’s platform account for the majority of the company’s revenue (57 percent of units sold in the most recent quarter). They usually pay for Amazon’s fulfilment services, advertising, and other features in addition to paying Amazon a referral fee in order for Amazon to sell their items. According to the company’s financial reports, Amazon raked in more than one hundred billion dollars in revenue through third-party service fees over the last year.

In the complaint that was submitted to the San Francisco Superior Court, it was stated that Amazon’s business practises were in violation of California’s Unfair Competition Law as well as the Cartwright Act, which is the primary antitrust law in the state. This investigation into Amazon has been going on for more than two years. It demanded solutions, which included putting a halt to the anticompetitive actions and making restitution payments.

According to Mr. Haurek, the requested remedy “would compel Amazon to display greater costs to consumers, which is weirdly going against key goals of antitrust law.”

Mr. Bonta said that he believed the lawsuit would be successful where the District of Columbia had failed by presenting a great deal more information on how Amazon was affecting customers. He said that there was more study “than any other case has ever seen,” and he added that the statute of the state of California gives some extra safeguards.

Amazon took action last month to stop the agency’s requests to interview Jeff Bezos, the company’s founder, and Andy Jassy, the company’s chief executive, in connection with the Prime investigation.

Amazon is also on the radar of lawmakers in Washington, who are keeping a close eye on the company. The corporation has been quite vocal in its opposition to a proposed antitrust law that would prevent Amazon from giving preferential treatment to its own goods in the company’s online shop. As politicians focus their attention on the midterm elections, the likelihood of the idea being passed into law may decrease even more.

In other instances, Amazon has taken a more diplomatic approach. In response to an investigation into the company’s retail practises in Europe, the company suggested a number of policy adjustments. These adjustments included restricting the information it collects from competitors’ sellers and granting those competitors the ability to sell to Prime members independently of Amazon’s logistics programme.

Jonathan James
I serve as a Senior Executive Journalist of The National Era
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