A PYMNTS Company

Amazon’s Unanswered Offer to Settle California Antitrust Investigation

 |  October 18, 2023

In a move to avoid an antitrust lawsuit filed by the California attorney general’s office, Amazon extended an offer to settle the dispute, promising to revise its seller notices and pricing policies to ensure that it does not demand price parity with other online platforms.

This development has now been revealed to have taken place one year ago, days before the state of California initiated legal action against the e-commerce giant, accusing it of contributing to “artificially high prices” for consumers, reported Bloomberg.

Bryson Bachman, Amazon’s lead competition lawyer, penned a letter dated September 13, 2022, addressed to the California attorney general’s office, expressing the company’s willingness to make the necessary policy changes. A previous letter expressing the offer, dated September 8, 2022,  did not receive any response, Bachman revealed.

The core of California’s legal complaint, filed in September 2022, centered on Amazon’s merchant agreements. These agreements, according to the state, prevented sellers from offering lower prices on alternative websites, backed by stringent penalties for non-compliance. Amazon had indeed offered amendments to these policies to deter the California lawsuit, but Attorney General Rob Bonta deemed these adjustments unsatisfactory.

Amazon is currently embroiled in legal disputes on multiple fronts, as it continues to contest the California lawsuit alongside a federal antitrust suit lodged a month earlier by the US Federal Trade Commission, with the support of 17 state attorneys general.

Read more: Amazon Must Face California Antitrust Suit

The California attorney general’s office has opted not to comment on Amazon’s settlement letters. On October 12, Attorney General Bonta remarked that Amazon had not made any efforts to resolve the case since the lawsuit was launched. This is in contrast to Amazon’s prior settlements of competition inquiries in Europe and the UK.

Bonta noted that Amazon had adopted a staunch approach of “fighting it the whole way,” despite California’s earlier attempts to engage in discussions with the company’s senior attorneys, including General Counsel David Zapolsky, before taking legal action.

Amazon, however, refuted the assertion that it had not offered to settle the case with California. According to Tim Doyle, an Amazon spokesperson, the company had presented multiple settlement proposals to the California Attorney General’s office, aiming to address concerns without burdening customers with higher prices. Doyle added, “Although we have not received any counteroffers from the California AG to date, we remain hopeful for constructive dialogue going forward.”

This lawsuit has its roots in a Bloomberg News report from three years ago, which exposed Amazon’s policies as pressuring sellers to raise their prices on competing platforms such as Walmart. The report revealed that Amazon would relegate products with lower prices on other platforms to the depths of its search results, discouraging such price differentials. A trial date for the lawsuit has been scheduled for 2026.

Source: BNN Bloomberg