Today, the California Attorney General filed an antitrust lawsuit that claims Amazon’s pricing practices prevent retailers from offering lower prices than Amazon’s store. The AG fundamentally misunderstands the retail industry and misconstrues Amazon’s practices. Amazon aims to provide our customers with the best possible shopping experience, including low prices. If the AG were to prevail, Amazon would be forced to highlight higher, uncompetitive prices to customers. This would only hurt consumers and sellers in Amazon’s store.
Sellers in Amazon’s store set their own prices for the products they offer. Amazon makes no effort to prevent them from offering lower prices elsewhere. But Amazon knows customers expect to find low, competitive prices in the Amazon store. Amazon, like any store, reserves the right not to highlight prices that are uncompetitive compared to other major retailers. When sellers set prices that are uncompetitive compared to these retailers, those offerings are still available to customers in Amazon’s store, but Amazon does not highlight them.
The AG wants to change that practice, requiring Amazon to highlight higher prices to our customers than what they would pay if they shopped elsewhere. Doing this would damage our customers’ trust in Amazon’s store and hurt the predominantly small and medium sized businesses who sell in it.
The AG is trying to solve a problem that doesn’t exist, namely a lack of competition in retail. In reality, the retail industry is strikingly large and extraordinarily competitive. Tens of thousands of retailers compete every minute to improve services, add benefits and features, invent new products, expand selection, lower prices, and speed up shipping times. Customers select from the numerous shopping experiences these retailers offer—from walking the aisles of a physical store to making purchases through the metaverse. Retailers, including sellers in Amazon’s store, likewise have ever-growing options to reach customers, including physical stores, online marketplaces, and their own online stores. The AG’s lawsuit simply is not needed to promote competition in retail—it is already thriving.
A similar lawsuit brought by the Attorney General for the District of Columbia was dismissed earlier this year. Amazon will again ask a court to step in to ensure that we can continue to provide customers with the best possible shopping experience, including by highlighting the best offers at the lowest prices.