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Posted by2 months ago
WholesomeTake My Energy

California Sues Amazon for Alleged Antitrust Violations That Inflated Prices, Stifled Competition

904 comments
94% Upvoted
level 1

Specifically based on this:

California alleges that Amazon requires them to sign agreements that penalize them for offering their products at cheaper prices on competing sites such as Walmart or Target. Those who don’t comply may get pushed lower in Amazon’s search results or be disqualified from being featured in the site’s “buy box,” the suit alleges, and may even be suspended or removed.

As well as:

According to the complaint, Amazon also forces wholesalers into agreements that penalize them if Amazon lowers its prices to match those of competitors and its profit margin falls below a specified minimum. In some cases, the complaint says, Amazon demands that wholesalers compensate it if competing retailers lower prices on their products.

However, before any anti-Amazon people get too excited:

In response to a similar lawsuit filed by D.C’s attorney general last year, Amazon said its policy on merchants that work with other sites is designed to protect consumers from being overcharged. The company has said it decides which third-party merchants to feature based on price, delivery speed and other factors.

...

In March, that suit was tossed out by a Superior Court judge in the District of Columbia based on Amazon’s motion to dismiss.

In the DC case Amazon argued that contractual pricing rules are a common practice in the retail industry and completely legal.

In other words, this has a long way to go before it actually means anything, and California better have a pretty solid case to win out here. Additionally, just because this is an anti-trust case does not mean the outcome here is a break up of Amazon. California is asking that Amazon should be forced to stop the alleged practices, receive damages associated with the practices, and for there to be fines to be associated with any continuation of the practice.

956
level 2
Comment deleted by user · 2 mo. ago
level 2

People in this thread are acting as if they’ve never bought a store brand item in their lives. Literally every large retailer does this.

191
level 2

Pretty normal for a large buyer to insist on a vendors lowest price.

20
level 2

amazon definitely did this for the kindle.

15
level 2

I literally said this last month on Reddit and got downvoted into oblivion by third party amazon sellers…..

Edit: oblivion not iblivious

3
level 2

Walmart does this too, in fact they wrote the book on it.

3
level 2
Comment removed by moderator · 2 mo. ago
level 2

Wait...so Amazon's policy saves me the trouble of having to search multiple websites to make sure I'm getting the best price? And how does this result in higher prices or hurt the consumer?

9
level 2

What's anti-competitive about having a contract that says you can't sell the same product for less at another retailer?

That sounds, extremely competitive. It's the same product, why should it be a different price just depending on where you are buying it from?

I mean maybe it would be anti-competitive if it said you have to sell the same product at Company XYZ for more than you are selling it on Amazon, but even then it's not anti-competitive between Amazon and the wholesaler, but Amazon and Company XYZ.

3
level 2

Exclusivity agreements are just a way for large companies to exert their will over smaller companies and people. Even if you get some sort of benefit by signing one, they're only doing it because you're going to make them more money that way.

3
level 2

So basically like a favored nations contract? The lowest price will always be on Amazon, and may possibly be on other sites too?

That doesn’t seem that bad to me, I’m sure that there’s some part of this I’m missing or misunderstanding.

1
level 2
Comment removed by moderator · 2 mo. ago
level 2

How is that different than what Microsoft did in the 90's?

1
level 2

The ninth circuit is historically more fair than any other so I’m keeping hope alive

-2
level 2

Amazon violates antitrust laws everywhere, using their retail business to benefit other areas. They refuse to allow any merchant to sell Google products because Google refuses to preload Amazon apps. They prioritize products that have Alexa. They have special placement for their own products that no competitors are allowed to purchase, no competition.

The theory that they control prices is so much harder to prove, maybe impossible without direct evidence.

0
level 2

Everything I buy off Amazon is because it's cheaper there AND I don't need to go get it. Like wtf...

1
level 2

Is this lawsuit in reference to vendors that Amazon purchases from wholesale and sells, or just vendors that use their platform as a storefront? I could see the distinction being very important.

In the case of Amazon functioning as a reseller, that is more in line with other retail outlets. In the case of vendors that choose to use Amazon as a storefront/listing page it would seem more akin to advertising with the addition of payment processing services.

I don't know, is it common for say Fox to charge Pepsi more or reduce their airtime if Pepsi also advertises on NBC and the NBC commercial has a coupon on it that Fox's does not?

1

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