Report from Reuters
In Brief – California Attorney General Rob Bonta has asked a state judge to issue a preliminary injunction against Amazon blocking the company from penalizing third-party sellers who offer items on other platforms such as eBay and Walmart for lower prices. Bonta alleges that Amazon and rival third-party retailers agreed to raise prices or withhold products on competitor sites that charge lower fees to prevent the ecommerce giant from being undercut. The state argues that third-party merchants who resisted Amazon’s pricing demands risked losing access to the Amazon “Buy Box,” the prominent purchase feature that accounts for most sales on Amazon’s platform. The state’s antitrust lawsuit, filed more than three years ago, is scheduled for trial in early 2027. Amazon said its agreements with merchants are lawful, industry-standard, and ultimately beneficial to consumers. The trial for the lawsuit is scheduled for January 2027.
Context – The California AG lawsuit targets Amazon pricing policies described as “price parity” or “price fixing” that have been in the crosshairs of competition regulators for years. Amazon argues that they simply push third-party sellers to lower their prices on Amazon, which benefits shoppers on the platform. Critics respond that Amazon penalize third-party sellers who want to sell their goods for lower prices on other platforms that charge lower seller fees to reduce low price competition to sales on Amazon. Price parity tactics are especially problematic because Amazon fees often reach 50% and it is the dominant online marketplace in many major markets. Sellers that could offer lower prices to shoppers on other platforms that charge them lower fees won’t risk losing sales to Amazon’s Buy Box penalties. Amazon’s pricing practices are the subject of class action lawsuits in US federal court and in the UK, are part of the US FTC’s major antitrust case, a federal antitrust lawsuit by defunct low-fee online marketplace Zulily, and a recent antitrust order and €59 million fine from Germany’s competition authority.