An Amazon delivery person on February 2, 2021 in Hawthorne, California (AFP/Archives/Patrick T. FALLON)
California’s attorney general on Wednesday launched lawsuits against Amazon, which he accuses of abusing its dominant position to stifle competition and drive up prices, a complaint that adds to the already numerous attempts by regulators to curb the expansion of the giant.
“Amazon forces merchants to agree to deals that keep prices artificially high, knowing full well they can’t afford to say no,” prosecutor Rob Bonta said in a statement.
“For years, California consumers have paid more for online purchases because of Amazon’s anti-competitive practices,” he said.
According to the investigation conducted by the prosecutor’s office, the e-commerce juggernaut “severely penalizes” companies if their products are sold for less on other platforms.
The other market places therefore have no chance of emerging, explains the prosecution, since Amazon dominates online consumption, in particular thanks to its loyalty program, Prime.
According to a study conducted by Feedvisor and cited by the press release, 96% of Prime subscribers are more likely to buy products on the platform than anywhere else, and 74% of all American consumers go directly to Amazon. when they decided to buy something on the internet.
As a result, “more and more third-party merchants are adopting Amazon every day, despite the fact that their total costs to sell on this site are significantly higher than those of other online stores”, assures the prosecutor’s office.
“We have nowhere else to go and Amazon knows that very well,” an anonymous seller quoted in the statement said.
– “Amazon is proud” –
Many US states are investigating the anti-competitive practices of tech giants and have launched lawsuits, including against Google and Meta (Facebook), for violating competition law.
A previous complaint against Amazon, filed by the attorney general for the city of Washington and similar to that of California, was dismissed in March by a judge.
“We hope that the Californian justice will reach the same conclusion as that of Washington and will quickly dismiss these lawsuits”, reacted the Seattle group, contacted by AFP.
“Vendors set their own prices for the products they offer on our store,” the spokesperson said. “Amazon is proud to offer low prices on a very wide selection. And like any store, we reserve the right not to promote offers that are not competitively priced.”
He assures that if Rob Bonta won his lawsuit, the platform would be “forced to display higher prices for customers, which would oddly go against the essential principles of competition law”.
Amazon insists in each publication of quarterly results and in press releases on the positive influence that it considers to have for SMEs.
Last July, “Amazon’s partners, who are mostly small and medium-sized businesses, had their best Prime Day,” the company said on a promotional campaign. “Their retail sales growth (on the platform) has exceeded that of Amazon products.”
– California “hypocrite” –
It will be “extremely difficult to prove that Amazon is driving up prices,” said Neil Saunders, a director at GlobalData.
According to the analyst, the contracts criticized by the prosecutor are not unusual, and do not prevent merchants from lowering their prices, as long as they also do so elsewhere, which guarantees the best prices for the site’s customers.
“It’s also a bit hypocritical of California to feign concern for consumers when the state has policies that keep many prices and taxes, like gasoline, very high.” , he added.
The US Congress has been working on its side for years to reform competition law.
A series of bills directly targeting Google, Apple and Amazon were approved by a parliamentary committee in June 2021, then by the Senate Judiciary Committee last January.
The texts seek to limit the control exercised by these companies over their sales platforms (application stores for Google and Apple), where they are both judges and parties.
This involves, for example, preventing them from favoring their own products, interfering with the prices set by merchants or even using to their advantage non-public data generated by the sales of other sellers.
But the final vote has been postponed several times.
© 2022 AFP
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