California on Wednesday filed an antitrust suit against Amazon over its pricing scheme, NPR reports.
State Attorney General Rob Bonta filed a lawsuit accusing the online retailer of pushing suppliers and third-party sellers into anticompetitive deals that result in higher prices for consumers.
The lawsuit argues that the deals lead to higher pricing not only on Amazon but at rival retailers.
The suit alleges that Amazon penalizes sellers that offer lower prices on other platforms, including at Walmart or Target.
The lawsuit argues that Amazon penalizes these sellers by displaying their items less prominently or blocking their new postings.
"Amazon makes consumers think they are getting the lowest prices possible," the lawsuit alleges, "when in fact, they cannot get the low prices that would prevail in a freely competitive market because Amazon has coerced and induced its third-party sellers and wholesale suppliers to enter into anticompetitive agreements on price."
The lawsuit marks the biggest legal challenge to Amazon yet, though regulators have investigated Amazon as well.
A spokesperson for Amazon denied any antitrust violations, pointing to a similar lawsuit in Washington D.C. that was dismissed.
"Sellers set their own prices for the products they offer in our store," the company said in a statement. "Like any store we reserve the right not to highlight offers to customers that are not priced competitively."
Amazon also previously proposed a settlement with European antitrust regulators who charged the company with violating competition laws, according to NPR.