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New Lawsuit Filed Against Amazon Says The Firm Pressurizes Merchants To Keep Prices Artificially High

A new lawsuit has made its way toward Amazon, accusing the firm of shocking behavior toward merchants.

California’s Attorney Journey lawsuit described how the eCommerce giant pressurizes its merchants to keep prices artificially high. Similarly, any decision taken by a merchant to put lower prices on rival sites is also prohibited.

Now, California is not going to allow such behavior as the state warned the company against banning its sellers from setting out lower price points on so many other websites.

Rob Bonta, California's Attorney General, filed the lawsuit on Wednesday, clearly alleging the firm for being involved in the stifled competition. This way, it was directly making its consumers pay extra for various goods and services via its manipulative pricing strategies.

Most of the lawsuit centers around a simple fact. And that’s linked to merchants getting into an agreement that prohibits them from agreeing on lower prices. These are for archrival pages like Walmart, eBay, and even Target.

If a merchant goes against the agreement and terms outlined by Amazon, they’ll be penalized in a way that risks the loss of visibility or even access to the platform.

The company knows very well that merchants have been put in a very vulnerable position thanks to this clause, and they’re forced to deal with it. Moreover, Amazon is also taking a lot of advantage of its popularity.

It is a leader because most users turn to the app as it’s a place that’s observed as a one-stop shop for everything. Moreover, they get a sort of convenience that’s rarely found anywhere else and hence, end up paying extra than others. And this is what the Attorney General’s office feels is a true example of market dominance.

At the same time, practices like this can also end up causing a massive increase in costs of commodities than would not occur if the market was actually competitive. It’s like paving the way for an artificial price hike and making people pay high bucks for no reason.

And this has nothing to do with Amazon being a great retailer. Instead, it’s more related to the firm forbidding others to pave the way for lower prices via coerced contracts.

If you think the news of the lawsuit has Amazon worried, think again!

The company claims it’s more than confident that such lawsuits won’t continue for long and will end up getting dismissed soon. They also quoted how a similar case was put up for discussion in court and was dismissed by the state of Washington’s attorney general.

The shocking part is how they see absolutely nothing wrong with the behavior. The company instead offered to give a justification for the ordeal by shedding light on how it could better reduce prices for everyone as a whole. They also added that seeing one seller offer lower prices is wrong because it gouges the platform’s users, which they find unacceptable.

The lawsuit disagrees and feels Amazon is just trying to trick users into believing they offer the best rates, and that’s far from the truth. And they’re doing it at the expense of vulnerable sellers.


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