Arizona Attorney General Kris Mayes has launched a landmark lawsuit against Amazon, accusing the tech giant of engaging in unfair and deceptive business practices that have harmed consumers and small businesses in the state.
The lawsuit alleges that Amazon’s anti-competitive and monopolistic practices have artificially inflated prices for Arizona consumers and stifled competition from smaller third-party retailers.
The lawsuit highlights two specific practices that Amazon has employed to maintain its market dominance. The first is the company’s Prime cancellation process, which the lawsuit claims is intentionally confusing and misleading.
Amazon Faces Legal Action from Arizona AG Kris Mayes Over Anti-Competitive Behavior
Dubbed “Project Iliad,” the process is designed to dissuade users from leaving the service, with internal documents showing a 14% reduction in Prime cancellations as a result.
The second practice targeted in the lawsuit is Amazon’s Buy Box algorithm, which determines which product offer is made available via the “Buy Now” or “Add to Cart” buttons.
The lawsuit claims that the algorithm is biased toward offers that maximize Amazon’s profits, often favoring its own products or those of its sellers over other products not fulfilled by Amazon.
Additionally, the lawsuit accuses Amazon of enforcing unlawful price parity agreements through its Business Service Agreement, which prevents third-party sellers from offering lower prices outside of Amazon.
This, the lawsuit claims, has hindered competition against Amazon as a retailer and marketplace provider, ultimately inflating prices for Arizona consumers.
The lawsuit seeks to hold Amazon accountable for its violations of Arizona state laws and to change its business practices to comply with the law. As Attorney General Mayes stated, “Arizona consumers deserve to be treated fairly and without deception by big corporations like Amazon, and small businesses deserve a level playing field.”
