AG files lawsuit against Amazon for unfair and deceptive business practices

PHOENIX – Arizona sues Amazon!

Attorney General Kris Mayes announced the lawsuit Wednesday, claiming the online giant used unfair and deceptive business practices under the Arizona Consumer Fraud Act and the Arizona Uniform State Antitrust Act.

“Amazon’s anticompetitive and monopolistic practices have artificially inflated prices for Arizona consumers and harmed small, third-party retailers that rely on its platform,” said Attorney General Mayes. “Amazon must be held accountable for these violations of our state’s laws. No matter their size and power, all companies must play by the same rules and follow the same laws as everyone else.”

Part of the lawsuit highlights Amazon Prime’s cancellation process. He claims the process is intentionally confusing and misleading, a strategy Amazon calls Project Iliad. The process would have required users to navigate a complicated and manipulative interface with biased wording, confusing choices and repeated nudges.

This process would have been used to dissuade users from leaving the service. According to the AG’s office, internal documents show that the Iliad project successfully reduced Prime cancellations by 14%.

A second part of the lawsuit targets Amazon’s Buy Box algorithm. The method aims to determine which offer for a given product is available via the “Buy Now” or “Add to Cart” buttons.

The lawsuit claims that the Buy Box algorithm is actually biased toward deals that maximize Amazon’s profits, often favoring its own or its sellers’ products over other products not supplied by Amazon.

Additionally, the lawsuit accuses Amazon of unfairly maintaining its market dominance by enforcing illegal price parity agreements through its Commercial Services Agreement. The agreements would prevent third-party sellers from offering lower prices outside of Amazon, hindering competition with Amazon as a retailer and marketplace provider, ultimately inflating prices for Arizona consumers.

“Arizona consumers deserve to be treated fairly and without deception by big companies like Amazon, and small businesses deserve a level playing field,” said Attorney General Mayes. “Amazon should change its business practices to comply with Arizona law.”