Amazon, the largest online retailer in the world, now accounts for some 37.8% of all e-commerce sales. The U.S. has antitrust laws on the books intended to encourage healthy competition between companies, and to help keep the free market working by preventing monopolies.  It’s hard to believe that Amazon has not been taken to task as one so far.

That is about to change, at least in the state of California. A few weeks ago the attorney general there filed an antitrust lawsuit claiming that Amazon is stifling competition, leading to higher online prices for consumers.

According the The New York Times, “the lawsuit largely focuses on the way Amazon penalizes sellers for listing products at lower prices on other websites. If Amazon spots a product listed cheaper on a competitor’s website, it often will remove important buttons like “Buy Now” and “Add to Cart” from a product listing page.”

This impacts third-party merchants selling through Amazon’s website – and these businesses now make up more than half of Amazon’s sales.There are over 500,000 sellers on Amazon Marketplace in the U.S. While many using this platform to sell their products are not independent retailers, some are. The top categories of merchandise selling well on this platform are home and kitchen; sports and outdoors; toys and games and beauty and personal care.

Those who sell merchandise on Amazon Marketplace are barred from offering lower prices on other sites – possibly even their own website. Instead of lowering prices on Amazon to comply with this requirement, many vendors raise their prices elsewhere. It is specifically this harm to the consumer that the lawsuit hopes to prevent, however Amazon’s practices are clearly also putting the squeeze on Marketplace retailers.

California Attorney General Bonta alleges that “Amazon’s price parity agreements have expanded and entrenched Amazon’s market power as an online retail store, impeded rivals, and resulted in pricing above competitive levels in California in violation of the Unfair Competition Law and the Cartwright Act.”

Every retailer today is a rival of Amazon, whether we sell online or not. Bringing the giant to task for unfair practices against its Marketplace vendors is one small step towards leveling the playing field for us all.

Happy retailing, 

Carol “Orange” Schroeder