Timeline on Antitrust Lawsuit for Blocking Price Competition
The State of California sued Amazon in September 2022 for violating state antitrust law, alleging that the retail giant prevents price competition on its platform by prohibiting sellers on its marketplace from offering lower prices elsewhere.
The suit alleges that Amazon uses its dominance of the online retail market to coerce third-party sellers and wholesalers into anticompetitive agreements that penalize sellers for selling their products at a cheaper price anywhere else, including their own websites. The effects, the complaint alleges, are Amazon-imposed “price floors.”
Amazon’s “price parity agreements” for its third-party sellers were previously removed from Amazon’s Marketplace agreement after calls from Congress to investigate in 2019, but California alleges that Amazon continues to penalize sellers who discount their products off Amazon, restricting their access to important Amazon marketplace features.
The complaint says that Amazon also forces wholesale suppliers into “minimum margin agreements.” These agreements say that, if Amazon finds a wholesaler’s product for a lower price somewhere else, Amazon will lower its own prices but require that the wholesalers pay to make up the difference. This also has the effect, the suit says, of preventing Amazon’s competitors from lowering their prices.
The lawsuit asks the Court to impose financial penalties on Amazon and stop it from continuing its anticompetitive behavior.