A package with the Amazon logo is transported at a packing station at Amazon’s redistribution center in Horn-Bad Meinberg, western Germany, on December 9, 2024.
Ina Fassbender | AFP | Getty Images
Amazon put pressure on major brands such as Levi Strauss & Company and haynes California Attorney General Rob Bonta said it was part of a broader price-fixing scheme to inflate listing prices on competing online marketplaces.
Newly released documents Monday are part of a 2022 antitrust lawsuit that claims Amazon has stifled competition and raised the prices consumers pay on the internet. The complaint focuses on Amazon’s contracts with millions of vendors, which Bonta says “keep prices artificially high” on competing platforms.
Bonta argued that Amazon’s dominant position in online retail forces vendors to agree to Amazon’s demands.
Amazon has previously disputed Bonta’s claims. An Amazon spokesperson told CNBC in a statement that the company will respond in court “at the appropriate time.”
“The Attorney General’s motion is a clear attempt to distract from weaknesses in the case, more than three years after the complaint was filed, and based on ‘new’ evidence obtained over many years,” the spokesperson said in a statement.
The documents released Monday include a 2022 correspondence between Amazon and underwear maker Hanes, in which it sent the vendor a link to the listing. target and walmartwebsite shows lower prices than Amazon.
Haynes admitted to “contacting Target and Walmart to increase prices,” the filing states.
In another case, Amazon warned Allergan that it had temporarily blocked listing of its eye drops after discovering they were being sold cheaper elsewhere. In response, the medical products company said, “Walmart has restored the price to $16.99,” and called on Amazon to lift the sales restrictions on the product. Amazon agreed, according to the filing.
Amazon also allegedly pressured Levi’s to ask Walmart to increase the price of khaki pants, which were being offered at a lower price than Amazon’s listing price. Walmart raised prices, the applicants said.
Hanes, Levi’s, and AbbVieAllergan, which owns the company, did not respond to a request for comment.
Bonta’s office asked a San Francisco Superior Court judge to block Amazon from engaging in the alleged price-fixing while the case is pending. The department also asked the court to appoint an independent monitor to monitor Amazon’s compliance. The case is scheduled to go to trial in 2027.
“In order for Amazon to protect its profit margins, Amazon is hiring powerful vendors who are raising prices elsewhere or poaching entire products from competing retailers,” Bonta said on a call with reporters Monday. “That’s not competition. It’s price fixing, and it’s illegal under California law.”
Based on various estimates, Amazon controls 50% of the U.S. e-commerce market. The company has long argued that its pricing policies keep prices low for consumers.
Several antitrust claims are aimed at its pricing mechanism.
The Federal Trade Commission and 17 states sued Amazon in 2023, alleging that it used its monopoly power to squeeze sellers, resulting in higher prices on rival websites. Washington, D.C.’s attorney general sued Amazon over its pricing policies in 2021, and European regulators are also scrutinizing the issue.
Amazon’s third-party sellers, who account for more than 60% of the products the company sells, also claim that the company uses pricing algorithms to prevent them from offering lower prices elsewhere on the web. Doing so, they say, risks losing the “buy box,” the part of Amazon’s product listings where shoppers click “buy now” or “add to cart.”
Analysts estimate that about 80% of Amazon’s sales flow through Buy Box.
Bonta said Amazon is a vendor, Target, Walmart, chewy, best buy and home depotto raise the overall market price.
“We don’t talk in general anymore,” Bonta told reporters. “We condemn this act and the companies behind it.”
