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Amazon must face California lawsuit claiming its prices are too high, judge says

FILE PHOTO: An Amazon delivery worker loads a trolley from a Prime van in Los Angeles

By Jonathan Stempel

(Reuters) -A judge has rejected Amazon.com Inc's bid to dismiss California's antitrust lawsuit accusing the online retailer of illegally forcing merchants to accept policies that cause consumers to pay artificially high prices.

Judge Ethan Schulman in San Francisco Superior Court said California sufficiently alleged that Amazon's policies "have had the anticompetitive effect of raising prices on competing retail marketplaces as well as on third-party sellers' own websites."

Amazon declined on Friday to comment on the decision, which is dated March 30.

California Attorney General Rob Bonta had sued Seattle-based Amazon last September.

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He accused the retailer of threatening to cut off merchants or deny them access to its "Buy Box"--where shoppers can click "Add to Cart" or "Buy Now"--if they offered lower prices on rivals such as Costco, eBay, Target and Walmart, and even their own websites.

The lawsuit sought to block Amazon from enforcing policies that bar the sale of goods more cheaply elsewhere, and to pay damages and penalties.

"There is no shortage of evidence showing that the 'everything store' is costing consumers more for just about everything," Bonta said in a statement.

Amazon has said the challenged policies affected only a tiny amount of commerce, and were actually "procompetitive" because it could offer products that might otherwise be unprofitable and facilitate discounting "to meet or beat the competition."

The retailer has also said consumers might end up paying more if Bonta's lawsuit succeeded, because it would be forced to feature higher prices on its website.

Washington, D.C. Attorney General Karl Racine is appealing a judge's March 2022 dismissal of his similar lawsuit against Amazon.

In January 2022, Amazon settled a price-fixing probe by Washington State Attorney General Bob Ferguson by paying a $2.25 million fine and shuttering a program that guaranteed minimum prices for sellers who agreed to stop competing on price.

The case is California v Amazon.com Inc, Superior Court of California, San Francisco County, No. CGC-22-601826.

(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)