California Files Antitrust Lawsuit Against Amazon
On Wed., Calif. Attorney General Rob Bonta filed a complaint against Amazon in San Francisco Superior Court accusing the retail giant of harming competition by forcing third-party sellers to commit to so-called 'price parity'.
Facts
- On Wed., Calif. Attorney General Rob Bonta filed a complaint against Amazon in San Francisco Superior Court accusing the retail giant of harming competition by forcing third-party sellers to commit to so-called 'price parity'.
- According to Bonta, the company has long abused its dominant position to distort the market. This was allegedly done by inflating prices to consumers and penalizing merchants that offered goods at lower prices.
- This antitrust lawsuit follows a two-year investigation of Amazon policies. It reportedly seeks the termination of anti-competitive practices and the designation of a monitor to ensure the company's compliance.
- Although limited to Calif., where Amazon has approximately 25M customers, this suit could have a nationwide impact if it's successful because other states could follow the state's lead.
- So far, attempts to tackle Amazon's alleged antitrust violations have yielded mixed results. A Seattle-based federal judge let a class-action suit move forward, but a Washington, D.C. federal court dismissed it.
- This comes as tech giants have been under antitrust scrutiny recently. The Federal Trade Commission is suing Meta, Google is facing state and federal suits in the U.S. while being fined in the EU, and the Dept. of Justice is reportedly preparing a case against Apple.
Sources: CNN, Vice, FOX News, New York Times, and Forbes.
Narratives
- Pro-establishment narrative, as provided by NBC. The backlash against big tech companies is ratcheting up, and this lawsuit might have the teeth to do damage to Amazon. California has stricter laws about unfair competition and other anti-trust violating practices than the federal government. A victory in California could set the tone for other states to pass similar laws.
- Establishment-critical narrative, as provided by The Orange County Register. This antitrust lawsuit against Amazon is part of a broader political campaign to punish tech giants for their success and to expand the power of government bureaucrats. Yes, the market isn't perfect, but it's not a coincidence that these companies have prospered while operating in a loosely regulated sector.
