Arizona has taken legal action against Amazon, launching two lawsuits that accuse the tech giant of monopolistic behavior and deceptive practices involving "dark patterns."
State attorneys general in the District of Columbia and California have made similar legal challenges, although the DC case was previously dismissed and is currently under appeal.
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Arizona's Stand Against Amazon
Arizona has filed two lawsuits against Amazon, accusing the company of monopolistic behavior and deceiving consumers through "dark patterns."
These legal actions echo similar complaints from the Federal Trade Commission (FTC) and various states. Attorney General Kris Mayes initiated the lawsuits under Arizona state laws in the Superior Court of Arizona.
The first lawsuit claims that Amazon's business practices violate the state's Consumer Fraud Act by employing design tricks, known as dark patterns, to make it difficult for users to cancel their Amazon Prime subscriptions. This accusation mirrors a lawsuit filed by the FTC against Amazon in June.
The second lawsuit alleges that Amazon breaches Arizona's Uniform State Antitrust Act by maintaining a monopoly. The company is accused of enforcing agreements with third-party sellers that prevent them from offering lower prices on other platforms, a tactic known as a "most favored nation" clause.
Challenging Amazon's Buy Box Algorithm
The Arizona antitrust lawsuit also challenges Amazon's Buy Box algorithm under the Consumer Fraud Act. This algorithm determines which product in a category gets prime placement with a "Buy Now" button.
The Attorney General alleges that the algorithm is biased in favor of Amazon's first-party retail offers or offers from third-party sellers who use Fulfillment By Amazon.
As a result, The Verge reported that consumers are misled into believing that items in the Buy Box offer the best price when, in fact, they often end up overpaying for products available at lower prices from other sellers on Amazon.
This is because Amazon prioritizes offers that yield the highest fees for the company. These claims echo those in the FTC's recent antitrust lawsuit against Amazon, which includes participation from more than a dozen state attorneys general.
Arizona is seeking a court order to halt Amazon's alleged deceptive and anticompetitive practices, civil penalties, and the return of any ill-gotten gains.
Amazon spokesperson Tim Doyle expressed the company's surprise and disappointment over the lawsuits, stating that the Arizona Attorney General initiated the cases without reviewing any documents from Amazon.
Doyle argued that this led to a fundamental misunderstanding and mischaracterization of Amazon's business operations. He defended the Prime sign-up and cancellation processes as "clear and simple by design".
He warned that the lawsuits could force Amazon to adopt practices that harm consumers and the many businesses that sell on its platform, potentially leading to higher prices.