WHAT’S THE ISSUE?
Hagens Berman has been retained by Arizona Attorney General Kris Mayes and has filed an antitrust lawsuit on behalf of the state of Arizona. The lawsuit accuses the world’s largest online retailer of violating Arizona’s antitrust laws by allegedly “exploiting its monopoly power to impose price parity provisions that force third-party sellers to keep prices at supra-competitive levels even at non-Amazon retail sites, ensuring that prices on Amazon stay high.”
HOW HAVE ARIZONA CONSUMERS BEEN AFFECTED?
Amazon has operated in Arizona since at least 2010, according to the lawsuit. From its 17 fulfillment and sortation centers and 13 delivery stations in Arizona, Amazon dispatches Amazon orders to millions of Arizona customers who spend on average $91.55 per month on Amazon.com ($1,098 per year).
The lawsuit alleges that Arizona consumers have been harmed by Amazon’s price parity policies, which artificially raise the price of all goods sold on Amazon. The lawsuit states, “if an Arizona business owner sells a sweater on Amazon for $50, Amazon deems it a ‘violation’ of the BSA for the business owner to sell the same sweater on her own website for $45—even though she is not paying fees to sell via her own site.”
WHAT IS AT STAKE?
The lawsuit brought by the Arizona Attorney General and Hagens Berman brings claims under the Arizona Uniform State Antitrust Act. This law prohibits “a contract, combination or conspiracy…in restraint of, or to monopolize, trade or commerce.” Plaintiffs contend that Amazon’s pricing parity policies constitute such a contract, combination or conspiracy, enacted at the expense of Arizona consumers and that Amazon has attempted to establish and has established a monopoly in the market for online retail marketplaces and has used that monopoly to exclude competition and maintain supra-competitive prices. The lawsuit seeks relief through disgorgement, civil penalties, fees and injunctive relief to prevent Amazon from continuing its allegedly anticompetitive behavior.
ABOUT AMAZON’S ALLEGED PRICE PARITY AND ANTI-DISCOUNTING POLICY
According to the lawsuit, Amazon has “intentionally built and maintained [monopoly] power, and it uses a variety of strategies—including price parity—to smother competition.” In 2019, Amazon quietly eliminated a “Price Parity” clause in its seller agreement which had expressly prohibited sellers from offering their goods on other sites for lower prices than listed on Amazon. To continue its grip on pricing, however, Amazon still uses various policies and tactics to similarly prevent third-party sellers from offering lower prices off Amazon, including its “Amazon’s Standards for Brands,” a so-called “Fair Pricing” Policy, and a “Seller Code of Conduct,”.
Attorneys say Amazon uses automated computer software to scan the Internet for goods offered via other websites for lower prices than they are listed on Amazon. “Sellers are alerted of pricing ‘violations’ within minutes,” the lawsuit states. “And Amazon imposes penalties on offending sellers, including stripping offers of their Amazon Prime shipping eligibility,” as well as eligibility for the coveted Amazon Buy Box. The result is that Amazon allegedly faces less price competition from rival marketplaces, which enables Amazon to charge supracompetitive marketplace fees on every sales transaction, which in turn forces Arizona consumers to pay more for goods on Amazon than they would pay in a truly competitive marketplace.
TOP ARIZONA LAW FIRM
Hagens Berman is home to some of the most well-respected and successful lawyers representing plaintiffs, and the firm has achieved total settlements valued at more than $345 billion since its founding in 1993. The firm has taken on major institutions for fraudulent billing and predatory behavior, including other Big Tech companies, the mortgage market, utility companies, product manufacturers and other negligent parties. The firm has also filed active lawsuits against Amazon regarding its Buy Box algorithm in the U.S. and U.K.
