Arizona Attorney General Kris Mayes has filed two lawsuits against Amazon, accusing the online giant of unfair and deceptive business practices under the Arizona Consumer Fraud Act and the Arizona Uniform State Antitrust Act.
Users are forced to navigate an elaborate and manipulative interface with “skewed wording, confusing choices, and repeated nudging,” the lawsuit claims.
The cancellation process employs methods known as “dark patterns,” the lawsuit alleges, which “exploit cognitive biases to influence and manipulate consumer choices.”
Internal documents also allegedly showed that Project Iliad succeeded in reducing Prime cancellations by 14 percent.
“Amazon designs its product pages to obscure the fact that other offers for the same item are available on Amazon,” the lawsuit charges, noting that almost 98 percent of purchases on Amazon “are made via the Buy Box.”
While consumers are under the reasonable assumption that the “Buy Box” price is the best price available, the Buy Box algorithm is allegedly “biased in favor of Amazon first-party retail offers or offers from third-party sellers who participate in Fulfillment By Amazon.”
Amazon charges third-party sellers “hefty fees to store their inventory, pack their products, ship orders, handle returns, and communicate with customers” as part of Fulfillment by Amazon (FBA), the lawsuit says.
The lawsuit also accuses Amazon of unfairly maintaining its monopoly in the online retail market by “enforcing unlawful price parity agreements through its Business Services Agreement,” according to the press release.
These agreements are alleged to preclude third-party sellers from offering lower prices outside of Amazon, inhibiting competition against Amazon and ultimately inflating prices for its own consumers.
Not the First Time
The Arizona lawsuits are hardly the first time Amazon has found itself in court over its business practices.One practice was allegedly hiking the fees it charges to sellers so steeply that they took nearly half of every dollar a seller made using Amazon’s fulfillment service. The lawsuit also accused Amazon of “quietly and deliberately” raising prices through “a covert operation called ‘Project Nessie,” which, it alleged, intentionally inflated the prices Amazon shoppers paid.
In 2022, Washington State Attorney General Bob Ferguson announced that—through the results of a price-fixing investigation conducted by his office—Amazon would be shutting down its “Sold by Amazon” program nationwide.
Mr. Bonta alleged that to avoid pricing competition with other online e-commerce websites, Amazon requires merchants to enter into agreements that penalize them severely if their products are offered for a lower price on websites other than Amazon.
“We won’t allow Amazon to bend the market to its will at the expense of California consumers, small business owners, and a fair and competitive economy,” Mr. Bonta said in a press release announcing his state’s lawsuit.
Attorney General Mayes feels the same way in Arizona.
“Arizona consumers deserve to be treated fairly and without deception by big corporations like Amazon, and small businesses deserve a level playing field,” she said. “Amazon should change its business practices to comply with Arizona law.”