Washington, D.C. — In response to new reporting revealing that Amazon offered to settle California Attorney General Rob Bonta’s antitrust investigation into the ecommerce giant mere days before the the state actually filed the suit, the American Economic Liberties Project released the following statement.

“Amazon’s hesitancy to face its allegations head on not only bodes well for the strength of Attorney General Bonta’s case, but is also a good sign for the Federal Trade Commission’s recent suit — which takes similar aim at Amazon’s small business extortion,” said Krista Brown, Senior Policy Analyst at the American Economic Liberties Project. “Companies often settle to stop legal scrutiny in its tracks. We’re glad the Attorney General didn’t accept Amazon’s concessions, and are looking forward to seeing what is uncovered in the discovery process.”

As reported by Leah Nylen at Bloomberg, Amazon sent a letter in Sept. 2022 to California’s attorney general’s office starting that it “was willing to change its seller notices and pricing policies to make clear that it doesn’t require price parity with other websites.” Amazon has a history of making policy concessions  to enforcers and regulators to avoid scrutiny, only for those same policies to later show up in slightly tweaked versions and different areas. Amazon’s policy of burying sellers who lower prices on other websites — the same one under scrutiny by the FTC and California — was already found to be anticompetitive by European antitrust regulators in 2013. Amazon promised to stop doing so in Europe, but the practice remains in the U.S.

As the FTC’s complaint reveals, Amazon has a market share of 82% when compared to other potential online superstores. Amazon, eBay, Walmart and Target. This is just one of the many sectors Amazon plays a dominant role in. Amazon is a retailer, a marketplace, a logistics service, a warehouse, a cloud service, a healthcare provider, a grocer, an investor, and much more. Amazon wields this monopoly power to suppress its rivals’ ability to compete on price and then force fees of around 50% onto sellers, which are then passed onto consumers. Since Amazon is so big, sellers will do almost anything to maintain their place on its marketplace, including not lowering prices for their products on anywhere outside of the Amazon marketplace.

For some quick facts on Amazon’s market power, read our fact sheet.

For more information on how Amazon’s monopolistic behavior distorts our economy, read American Economic Liberties Project’s report from 2020, “UnderstandingAmazon.” 

Learn more about Economic Liberties here.

###

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.