California filed a suit Wednesday accusing Amazon of using its market influence to prevent merchants from offering buyers better deals elsewhere online, in violation of state antitrust law.
Amazon requires that merchants don't list items at lower prices on other websites, which hurts sellers and consumers, California Attorney General Rob Bonta said in the lawsuit.
"Amazon coerces merchants into agreements that keep prices artificially high, knowing full well that they can't afford to say no," Bonta said in a release.
"Many of the products we buy online would be cheaper if market forces were left unconstrained."
Amazon did not immediately respond to a request for comment.
The attorney general in Washington had filed a similar suit against Amazon, but a judge dismissed the case in March.
Amazon is such a dominant e-commerce site that merchants feel they have little choice when it comes to agreeing to the titan's selling conditions, Bonta's lawsuit argued.
Those demands include agreeing not to offer lower prices elsewhere, whether it be at Amazon rivals such as Walmart or a merchant's own website, the suit said.
Vendors who don't comply can see their listings made less prominent or even have their ability to sell items on Amazon suspended, according to the suit.
Sellers have reported that they can offer goods at lower prices on their own websites and some other e-commerce venues because they save on fees charged by Amazon, state attorneys argued.
But "with other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases," Bonta said.
"This perpetuates Amazon's market dominance."
Bonta is asking a state court in San Francisco to order Amazon to stop its price-floor practice and pay unspecified damages.