Amazon has been called the “everything store,” a digital one-stop shop selling whatever you can need. However, a lawsuit recently brought against Amazon by California’s attorney general has pulled back the curtain and claims that the retail giant is making everything cost more, including at other stores.
In the lawsuit, Attorney General Rob Bonta alleged that Amazon has required merchants and third-party sellers to enter agreements that would severely penalize them if their products were offered elsewhere at a lower price than what is listed on their platform. Sellers who don’t comply face swift penalties, including less prominent product listings, removal from the popular “buy box,” and even the possibility of having their ability to sell on Amazon terminated. Bonta claims this directly violates the state’s Unfair Competition Law and the Cartwright Act. The attorney general is seeking to prohibit Amazon from using vendors as pawns to coordinate pricing, as well as agreeing with vendors or competing retailers to fix or raise prices.
Bonta’s antitrust case can serve as a launching pad for Democrats – who are poised to win back at least the House of Representatives in November’s midterm elections – to make Amazon the face of price-fixing schemes that are raising costs for American consumers.
This is not merely an obscure legal dispute; there are significant allegations of Amazon engaging in deliberate, documented antitrust practices. Unredacted court documents, for example, show that Amazon had pressured third-party sellers to raise their prices across multiple platforms and to pull products from competing retailers under the threat of penalties.
The case out of California is just the tip of the iceberg. In 2023, Amazon reportedly developed a secret internal algorithm that could predict when competing online stores would follow its price hikes. Codenamed “Project Nessie,” the program was alleged by the Federal Trade Commission to have generated profits for Amazon exceeding $1 billion.
With more than 160 million Prime members, Amazon’s pricing practices touch almost every household in the nation that shops online. California’s case against the retailer has wider implications in retail across the country. The Federal Trade Commission, along with a coalition of attorneys general from 17 states, has filed a federal antitrust case alleging that the retailer holds and abuses an online retail monopoly. The suit, which goes to trial later this year, will target the company’s alleged monopoly. While this is long overdue, it’s the states that have been doing all the heavy lifting while Congress has been asleep at the switch.
America’s antitrust laws were written for a different time, and a different economy, and the Amazon case is the proof. Congress needs to act, and Europe offers a potential roadmap for policy fixes. The EU’s Digital Markets Act, for instance, prohibits dominant platforms from blocking merchants from offering lower prices elsewhere; the U.S. has no such equivalent.
Every overpriced item, from pet food to khakis to household staples, is a tax Amazon collects on its own market dominance. California’s attorney general has called it out. Now Congress must act to ban price parity and protect third-party sellers.
The “Everything Store” shouldn’t dictate the price of everything. It’s time to break Amazon’s grip.
