California Attorney General Rob Bonta filed a lawsuit Tuesday accusing Amazon of operating an illegal price-fixing scheme that artificially inflates costs for consumers and penalizes third-party sellers who offer lower prices elsewhere.
The lawsuit, filed in San Francisco Superior Court, seeks an immediate injunction to halt what Bonta calls "anticompetitive conduct" that has driven up prices across the e-commerce platform. The AG's office alleges Amazon forces sellers to maintain higher prices on competing platforms through contractual restrictions and algorithm-based penalties.
"Amazon uses its market dominance to ensure that consumers can't find lower prices anywhere else," Bonta said in a statement. "When a seller lists a product cheaper on their own website or another platform, Amazon buries their listings in search results or removes the Buy Box entirely. That's not competition—that's coercion."
The numbers don't lie: Amazon controls approximately 40% of U.S. e-commerce sales, giving it unprecedented leverage over the more than 2 million third-party sellers who depend on the platform for revenue. According to the complaint, sellers who violate Amazon's de facto price parity requirements see their visibility plummet, effectively cutting them off from customers.
For consumers, the impact is straightforward: you're paying more because Amazon won't allow sellers to compete on price. The AG's office cited examples where identical products cost 15-30% more on Amazon than on sellers' own websites—a markup that exists solely because of Amazon's algorithmic enforcement.
California is seeking an injunction rather than waiting for a lengthy trial, signaling the state believes the harm to consumers and competition is ongoing and immediate. If granted, the injunction would force Amazon to stop penalizing sellers for offering lower prices elsewhere while the case proceeds.
Amazon pushed back Wednesday morning, calling the lawsuit "misguided" and insisting it does not control seller pricing. The company's statement, however, didn't address the algorithm-based penalties or Buy Box removal—the mechanisms at the heart of Bonta's complaint.
