Amazon has been systematically fixing prices by “strong-arming” its vendors into charging more for their products on rival marketplaces, the state of California has alleged.
In a court filing unsealed on Monday, Golden State attorney general Rob Bonta accused the Seattle-based retail giant of engaging in an “illegal price fixing scheme that is artificially driving up prices for Americans.”
The court filing documents numerous examples in which Amazon allegedly contacted companies selling products on its platform and pressured them to lean on another online retailer to raise their prices in line with Amazon’s.
If they refused, the filing alleges, Amazon would “threaten dire consequences”, using its “overwhelming bargaining leverage” and threat of “punishment” to force them to comply.
“The evidence we’ve uncovered is clear as day: Amazon is working to make your life more unaffordable,” Bonta said.
“Amid a crisis of affordability, Amazon is illegally working to rake in profits by making sure consumers have nowhere else to turn to for lower prices. We’ll see them in court.”
He further asked the judge to immediately bar Amazon from discussing rival retailers’ prices with any of its vendors and appoint an independent monitor to ensure it complies.
Bonta’s filing is part of an ongoing lawsuit against Amazon in the Superior Court of San Francisco, which started in 2022 and is due to go to trial in January 2027.
Amazon denies the allegations and is contesting the lawsuit, calling Bonta’s motion “a transparent attempt to distract from the weakness of its case.”
‘We will fix the price by tomorrow’
Price fixing is when two companies that should be competing against each other instead work together to keep the price of certain products at an agreed level. It is illegal under both federal and state law.
The filing alleges that Amazon accomplished this indirectly. Knowing that most vendors could not afford to have their products dropped or penalized by Amazon, the company allegedly demanded that they pester rival online marketplaces to change their prices.
The company would regularly reach out to vendors asking them to “fix,” “increase,” “raise,” or “look into” the price of their products on other platforms, or to “manage” their “channels” to ensure higher prices, Bonta’s team alleged.
“These directives to vendors are backed by the threat of significant penalties for failure to comply — ranging from advertising and promotion restrictions, to demands for financial compensation, to the removal of vendors’ products from Amazon,” Bonta and his attorneys wrote.
In one example, Amazon allegedly contacted Levi’s to mention its “concern” about the prices being offered by Walmart for certain khaki pants, saying it “hop[ed] these can get resolved” soon.
A Levi’s employee allegedly responded: “I talked to Walmart and they have partnered with us to… take Easy Khaki Classic Fit back up to $29.99 immediately.” Amazon then allegedly raised its own prices to match.
A Walmart spokesperson told the Associated Press that it does “not comment on litigation in which we are not a party. We will always work hard on behalf of our customers to keep our prices low.”
Levi’s did not respond to the AP’s request for comment.
In another email, Amazon allegedly demanded that a home decor vendor compensate Amazon for its lost profits on 84 specific products, whose prices it had been forced to drop in order to match a lower offer from Home Depot.
According to the filing, Amazon continued to lean on the vendor until it reported back that it had persuaded Home Depot to raise its prices on all the desired products.
In other cases, companies allegedly withdrew their stock from other retailers so as to appease Amazon, making sure the products were no longer available at lower prices.
“Just got out of a meeting with the Home Depot manager and she has agreed to raise the prices this time,” one vendor of plant fertilizer assured Amazon in an email.
“We urgently asked the [other retailer] to stop running deals,” said another company that makes trash cans.
“I will fix the price and get back to you… we will fix the price by tomorrow,” said a vendor of salt lamps.
Bonta’s filing also claims that Amazon tried to keep these conversations off the books, instructing employees to “not use email” when negotiating specific prices.
One Amazon employee allegedly told a vendor that prices were “a delicate conversation for numerous reasons, and probably best suited for a phone call / virtual meeting.”
A spokesperson for Amazon said: “The Attorney General’s motion is a transparent attempt to distract from the weakness of its case, coming more than three years after filing its complaint and based on supposedly ‘new’ evidence it has had for years.
“Amazon is consistently identified as America’s lowest-priced online retailer, and we’re proud of the low prices customers find when shopping in our store.
“Amazon looks forward to responding in court at the appropriate time.”
