California sues Amazon for anticompetitive behavior

The state of California sued Amazon on Wednesday, alleging that the company caused higher prices across the state and “stifled competition.”

Amazon penalizes sellers on its site if they offer products elsewhere for lower prices, the state alleged.

That makes it harder for others to compete, therefore entrenching Amazon’s market power, the state said in a press release announcing the lawsuit.

“For years, California consumers have paid more for their online purchases because of Amazon’s anticompetitive contracting practices,” state attorney general Rob Bonta said in a statement.

Amazon did not immediately respond to a request for comment. Amazon founder Jeff Bezos owns the Washington Post.

The suit comes as regulators in Washington, the states and Europe are increasingly targeting the power and influence of the largest tech companies.

Yet some of these efforts have faced roadblocks in the courts, including a very similar lawsuit brought by Washington, D.C., attorney general Karl Racine (D) last year.

That suit was thrown out by a judge earlier this year, but Racine in August filed a notice that he would appeal that decision.

The California suit could foreshadow antitrust challenges against Amazon in Washington.

The Federal Trade Commission has been probing the company for years, and its chair, Lina Khan, is widely expected to take action against the company, following years of criticizing its alleged monopolistic practices as an academic and congressional staffer.

Amazon’s behavior has also come under scrutiny on Capitol Hill, where a bipartisan coalition of lawmakers have advanced bills that take aim at the way the company treats third-partysellers.

Amazon, other tech companies and their surrogates have mounted an extensive lobbying campaign to bat back the legislation.

California’s suit alleges that Amazon’s actions have harmed the state’s consumers and economy.

“Amazon makes consumers think they are getting the lowest prices possible, when in fact, they cannot get the low prices that would prevail in a freely competitive market because Amazon has coerced and induced its third-party sellers and wholesale suppliers to enter into anticompetitive agreements on price,” the suit alleges.